Levels to watch: FTSE, DAX and Dow

After a sharp sell-off across European and US indices, we are seeing a short term bounce coming into play. Is this going to be fleeting or the beginning of a wider recovery?

US charts trader
Source: Bloomberg

FTSE rebounding after crash lower

The FTSE smashed lower yesterday, following the break below the key 7253 support level. This has brought us back in the region of another key support level, with 7090 providing a crucial marker which, if broken, could lead to another round of substantial losses.

For now, the price remains above that mark and has managed to rebound moderately overnight. An hourly close below yesterday’s low of 7106 would point towards a challenge of 7090. Until then, there is a good chance we could see a more extended rebound while we remain above 7090.

FTSE chart

DAX rebounding from Fibonacci support

The DAX sold off into the 76.4% retracement overnight, in what still looks like a temporary pullback of the rally from 11,850. With that in mind, this looks like an interesting area for longs, with a break below 11,850 required to negate that notion.

One major threat to that idea is the fact that the top seen earlier in the month occurred within very close proximity to the all-time high of 12,408.

DAX chart

Dow treading water after sell-off

The Dow Jones sold off sharply from the 76.4% retracement yesterday, tumbling back towards Monday’s low of 20,438. However, with the price having failed to break below that level, we are seeing a gradual rise along trendline support this morning.

The ability to break back through that trendline and below 20,476 is key to showing whether we are set for a move back down towards the crucial 20,438. A break below that level would continue the wider downtrend. 

Dow Jones chart

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