Levels to watch: FTSE, DAX and Dow

Following yesterday’s selloff and subsequent bounce, the feeling is that we are likely to see the bears come back into play for today’s session as the International Monetary Fund payout deadline looms.

Source: Bloomberg

FTSE takes next leg lower
Yesterday’s big selloff in the FTSE 100 continued upon finding resistance around the 6691 resistance point which represents the 10 March low. Despite failing to regain the lows of 6510, the signs are pointing towards further losses today.

Overnight consolidation has given way to another bout of selling and the 6558 support level is all that stands between the current level and 6510. Ultimately I believe we will see further losses as long as price remains below the 6600 resistance level.

DAX looks to extend losses
The DAX also saw a sharp drop early in today’s session, which for the time being has been bought back into the overnight range. That being said, I do expect another move lower today to engage with the support triangle. Clearly we have failed to break below the region on a number of occasions and thus there have always been many buyers below 10,856.

However, with crisis and uncertainty looming in Greece, it seems likely that we will see yet another challenge of support. Whether or not we break through remains to be seen and will likely be dictated by progress – or lack therefore – in the Greek debacle.

Dow Jones bounces late, yet major resistance level is key
Unlike the European indices, the US markets took some time to start finding any buyers. As such we are awaiting the moment where it begins to turn lower again in the manner of the DAX and FTSE. Given that yesterday’s session closed below the 17,686 level for the first time in almost three months, I am bearish as long as price remains below this.

As such, any move back to 17686 would be seen as a selling opportunity to me. With all that is happening in Greece and the likes of a US jobs report to deal with later in the week, it would be no surprise for traders to retreat from the riskier investments such as equities and move towards sovereign bonds and alike.

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