Key levels: technicals for FTSE, DAX and Dow

Weaker-than-expected PMI data from the eurozone and China, coupled with hawkish minutes from the Federal Open Market Committee last night, has colluded to bring about a more subdued session on equity indices today.

FTSE moving average key to upside

The FTSE 100 is still anchored around the 6780 level, having been unable to establish a close above 6800 yesterday.

Support at the 100-hour moving average was tested in early trade at 6732, and the indices was afforded a bounce to the upside. This moving average is now, in my opinion, the key to the upside, with a range-bound trade set to continue between 6780 and this 6730 metric until we see a decisive break.

Clearly the daily upward trend is still in play but, with the daily relative strength index levelling out while it is not overbought, the index needs a catalyst to assert the next run up.

DAX loses 9610 support

The DAX is below 9600 and, with yesterday’s support of 9610 taken out, 9550 tested in early trade. However this current move may well be a bounce before it takes another leg down.

The next support, should we see a move below 9500, is the 50-daily moving average at 9458. Bear in mind that while we have a strong daily uptrend, the 9670/80 level remains somewhat elusive for the bulls.

Dow meets resistance at 16,200

The Dow Jones is now trading around the 50% retracement of the December highs and February lows, finding support at 15,965. There is strong resistance at 16,200 with the 50-DMA capping upside gains, and any move through it on a daily close would see 16,296 as the next target.

In the short-term the 200-hour moving average is supporting the price action, but the convergence of the 50- and 100-hour moving averages at 16,115 may see profit-taking should we see a push upwards.

On the downside, should the 15,965 level fail, the 15,892 and then the 100-day moving average will come into play at 15,876.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.