Levels to watch: FTSE, DAX and Dow

Indices in the UK and Europe have moved higher this morning ahead of the European central bank decision at lunchtime, after two days of indecisive moves.

US trader
Source: Bloomberg

FTSE aims higher
Having stabilised above 7040 over the previous two sessions, the index has now begun to move higher. A close above 7100 still remains the litmus test for the FTSE 100, but with the relative strength index (RSI) and stochastics still bullish the augurs look good for a continuation of the move higher.

So far this morning the 20-period exponential moving average (EMA) on the four-hour chart, 7056, has seen buyers step in. Only a move through 6900 on the downside would imperil the upward progression seen here.

DAX suited to the bulls
DAX traders will be on the guard against any ECB surprises, but none are likely to be forthcoming. 12,200 saw buyers step in yesterday, and while the daily RSI has dropped back so far this week it is now seeing something of a recovery.

On the four-hour chart the stochastic index is likely to provide another bullish crossover during the course of the session with an immediate target in any move upwards heading towards the 12,400 zone and then onwards.

The risk of a downward move is only really ignited by a firm drop below the 14-day EMA, 12,122. But this area has acted as remarkable support and should not be treated lightly.

Dow Jones looks to all-time highs
A dip below the 50-DMA of 17,940 for the Dow Jones was a cue for buyers to step back in again, but for the moment the index is not able to break above 18,060. A daily close above here still points towards 18,200 and then on to the all-time highs (and potentially beyond).

US markets remain, to some extent, at the mercy of the dollar’s mood and also to the constant drip of earnings news, but the momentum still seems to point to further upside.

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