Levels to watch: FTSE, DAX and Dow

Greek woes and a Federal Reserve meeting combine to make life volatile for indices today, with the morning session already proving to be eventful.

Chart
Source: Bloomberg

FTSE fluctuating
Although we saw a strong defence of the FTSE 100’s 6700 level yesterday, the market has so far struggled to break above the 200-day simple moving average at 6745. A bounce needs to sustain gains above this level, which might then raise the prospect of a move back to 6840.

Yesterday saw the market move below the 1 April low of 6672, but then come bouncing back, so there is still some buying activity out there. A drop through this April low would open the way to the lows of the year at 6300, reversing all the gains made in the past six months. 

DAX holding above 11,000
The market’s love for round numbers should never be underestimated, and the 11,000 level is doing the job nicely. We should look on continued DAX trading above this level as a bullish development, at least in the short-term, but to really clear the outlook of bearish signs the market must push through 11,300 in the near future.

Any close below 11,000 would signal more losses here, with a potential test of the 200-day SMA at 10,557 in the offing.

Source: Bloomberg

Dow Jones digs in
For a second day in a row yesterday Dow Jones buyers found the strength to hold the market above 17,700. The subsequent rally took us back to the cusp of 18,000 but for the moment the 100-day SMA at 17,970 is providing resistance.

With daily stochastics and relative strength index still bullish it looks like the momentum remains to the upside, although pre-FOMC jitters could cause a short-term retracement as hourly momentum indicators drop back from overbought levels. 

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