Key levels – technicals for FTSE and DAX

It looks like we could have a fairly quiet day in store, with half-term here in the UK and US Presidents’ Day also affecting trade volumes.

With little in the way of macro due today, markets will probably consolidate ahead of a bumper week of economic news. UK CPI and German ZEW economic sentiment tomorrow may well provide the catalyst for equity markets’ next moves.

FTSE upside hits resistance

The FTSE continues to be capped by the 6700/6710 level, with daily closing price action anchored around 6670/80 in recent days. Trendline resistance from the 22 January highs is keeping upside moves in check at this level for now. 

There has been good investor interest in buying upon any return to the 6605 level and the 200-DMA. Any breaches of this important support should confine themselves to a fall towards 6580. The 50-DMA is also providing support in the intraday with 6630/40. 

Any moves through the 6710/15 level on a daily closing basis should then see the index tackle the 6770 metric, which was something of a barrier to upside in mid-January. 

DAX could be subject to profit-taking

The 9680 level has been the bugbear for any additional upside in the DAX. Only a break and daily close above this makes the argument for a re-test of the 9790 highs.

The four-hour chart shows that the market is slightly overbought, and with bearish RSI divergence on the hourly chart we could see the profit-takers step in.

9600/10 is the bottom of the recent range and has been supportive for the past few trading sessions. The 50-DMA at 9430 should come into play if any significant sell-off occurs.

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