Key index levels: technicals for FTSE, DAX, Dow

A decline in precious metal prices has affected the markets.

Mining sector hold FTSE back

As a result of a this fall in gold and silver, the mining sector has kept the FTSE 100 from pushing through the 200-daily moving average. Yesterday, as anticipated, the market rallied up to this point before retreating. Ideally we would like to see a daily close above this metric and indeed back through 6620 to fall into full-on bull mode.

Right now, the range is tight with a low of 6533 seeing bids. The relative strength index has also broken back into neutral territory following marginally oversold conditions yesterday. The 1-hour bearish channel saw a break to the upside yesterday, so if we succeed in ramping up through 6585/90 we can expect to see 6625 tested.

On the downside, any pullbacks should be restricted to base support around 6500. Should that fail then 6470 will provide the next support.

Head and shoulders for DAX?

There has been some speculation that the DAX has produced a head and shoulders topping pattern (though the right shoulder to my mind should technically be smaller than the left), while below 9200/10 there is a bias for additional lows in this index.

A textbook completion of this potential reversal pattern is 8500, although one could expect that the 200-DMA will provide a modicum of support in advance of any dramatic declines.

In the intraday, the 50- and the 100-hour moving averages are supporting price action around the 9105 level. Level 9080 is the next support, with last week’s lows at 8910 likely to see bids should we see any near-term pullbacks. Any daily close through 9200 would target the 100-DMA at 9354.

Dow breaches 50- and 100-DMA

Yesterday’s Dow Jones rally saw both the 50- and 100-DMA breached, yet the index is still unable to make any inroads through 16,280. Any moves through here are likely to test 16,400.

The 50-DMA now turns into support at 16,130, with 16,076 coming in below that should the struggle to move higher continue. 

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