Levels to watch: FTSE, DAX and Dow

Markets have ticked higher on Friday following comments from the European Central Bank’s president Mario Draghi, who gave a big hint to the markets regarding the possibility of European quantitative easing

Mario Draghi
Source: Bloomberg

The ECB president stated that the European recovery was ‘fragile and uneven’ owing to the impacts of long-term low inflation – which, immediately following his comments, saw the euro push lower against the US dollar to levels not seen since 2010, and European stock markets edge higher while yields continued lower.

FTSE eyes 200-DMA

The FTSE 100 has added +0.48% on Friday, currently trading at 6,556, and has seen a move above the 50-day moving average – a level that now gifts traders a clearly defined area of support for a possible move higher with upside targets at the 200-DMA level of 6,585.

50-DMA capping DAX upside

Having backed off its December 26 high of 9,944, the DAX added +0.14% during Friday’s opening session, and is currently trading at 9,729. Having initially spiked to a high of 9,874 following the release of Germany’s manufacturing data; it is the bears that are currently winning the price action war with any upside being capped by the 50-DMA, which is currently trading at 9,802. Adding further downside pressure to the DAX is its relative strength index (RSI), currently trading at 46. The next clear downside target presents itself at 9,669.

Dow upside likely to meet resistance

The Dow Jones has dipped below the psychological level of 18,000, currently trading at 17,903, but remains up on Friday by 0.11%. However, any upside in the index is likely to be met with fierce resistance following a convergence of the 50- and 200-DMA at 17,968, coupled with a bearish reading in its RSI of 38.8 – both of which suggest a possible further downside, and could see a retest of December 31 low of 17,809. 

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