Levels to watch: FTSE, DAX and Dow

Further moves by the PBOC have put equity markets to flight yet again.

A man on the phone looking at data
Source: Bloomberg

FTSE stochastics bearish

With Chinese FX intervention now a daily occurrence, the bears have the upper hand here. Some support is still possible around 6500, and then at 6430, while further losses will take us back towards the January lows at 6300. Daily stochastics are now firmly bearish as well, and it will take hard work by bulls to push the index back towards 6650 as a first step in any turnaround.

FTSE 100 chart

DAX could fall to 10,700

The DAX now finds itself resting on the 200-day SMA, reaching this indicator for the first time since the beginning of July. A move below here targets the July low at 10,700, and then on to 10,500. A bounce from the 200-DMA would need to clear the 11,294 area to confirm that buyers are back in force, with the next target on the upside being 11,600.

DAX chart

Dow testing February lows

The index is testing the February lows I identified yesterday, with a move below here likely to head all the way to 17,000. The index is not yet in correction territory, but a drop through 17,000 would suggest that we are on course to explore the lows in the direction of the October 2014 bottom. A close back above 17,600 would transform the outlook, but that seems unlikely at present. 

Dow Jones chart

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