Levels to watch: FTSE, DAX and Dow

After a distinctly lacklustre day yesterday indices have turned lower this morning, but with so much data coming later in the week investors can hardly be blamed for this bout of nervousness.

Data reflected through a man's glasses
Source: Bloomberg

FTSE momentum indicators still bullish

Having retreated from all-time highs yesterday the index is doing its best so far this morning to hold above 7035, a level that marked resistance in mid-March but is now doing its best to act as support. A close above 7040 today leaves the bulls in control, although further support still enters the frame at 6960.

Daily relative strength index (RSI) and stochastic indicators are still in bullish mode, moving higher for yet another day, although the move downward yesterday has sullied the hitherto spotlessly bullish image that had been presented. A move back below 6960 would signal a fresh dip towards the 6800 area, but for the time being the index still looks minded to make another attempt at closing above 7100.

Intraday, the index must really maintain itself above the 50-hour simple moving average (SMA) at 7065, and with the RSI and stochastics rising in this timeframe the bulls have some hope that today will restore the more positive outlook.

DAX eyes close above 12,300

Having come so far in 2015, the DAX has been the weak performer of the past two days among major eurozone indices. However, for the time being moves below 12,300 tend to bring out the buyers. With so much riding on tomorrow’s data and European Central Bank news, Tuesday could be another day of positional warfare between the bulls and bears.

The latter has seen many false dawns in the DAX in recent weeks, so even a dip towards the 14-day exponential moving average (EMA) at 12,108 should be treated with care, as the index has shown a tendency to snap back rapidly. A close above 12,300 today would signal that a move to 12,500 is on the cards.

Dow buyers return

A modest pullback yesterday has not unduly disturbed the bullish outlook on this index, or on US indices generally. The overnight session saw buyers come back around 18,000, with the 20-period EMA (17,993) on the four-hour chart marking an area of support. A close above 18,100 in coming days would confirm that the target for this index remains 18,200 and then the all-time highs, should the momentum continue.

That momentum still looks strong, and in a better condition than in Europe, with the RSI and stochastic indicators still on an upward path. Only a move back below the 50-day SMA around 17,940 really damages the outlook. 

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