Levels to watch: FTSE, DAX and Dow

Indices attempt to regain ground lost from yesterday’s selloff, yet with Greece continuing to dominate sentiment, volatility and unpredictability is likely to continue. 

Data chart
Source: Bloomberg

FTSE hesitancy highlights potential retracement
Yesterday saw the FTSE 100 create a somewhat bearish candle with a long upper shadow, much like the one seen back on 11 June. Given that we also saw the same resistance level respected, I could see a similar move lower that creates a new right shoulder at 6730 region. The most important level here is the 6808 support, which if broken would point towards a stronger move towards the downside targeting 6750 (50% retracement) and 6730.

With intraday charts showing new lows being created, I am more bearish than bullish and do think it is likely we will move below 6808 before we move above 6870. However, as with all these charts, they will be significantly affected by news coming out of Greece so be aware of that.

DAX selloff halted as early spike brings possibility of another move higher
Everything was going to plan this morning, with the channel resistance around 11,618 having held and sellers coming back into dominance. However, the intraday charts provide us with a warning sign as the DAX has bounced this morning.

The inability to break below yesterday’s low of 11,363 was the first worry, while this spike higher we are currently seeing is likely to form a bullish engulfing which has the possibility of leading to price rising above the last notable intraday swing high of 11508.

If price does move above 11,508, then I would be looking for a move back towards 11,618. However, markets do not move in straight lines and as such, I will remain bearish while price is below 11,508.

Dow selloff shows signs of reversing
Yesterday’s break below 18,112 led to significant selling for the Dow Jones as a stark reminder that Greece is likely to dominate price action for the time being. However, with price having broken towards the upside of a three candle consolidation phase, it seems like we could be in for an equally bullish session today.

Given the move below 17,986, the worry is that price has now created a new low. Nevertheless, I do expect a strong session today and am looking for a continuation of this early strength to bring prices back towards the 18,056 level. 

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