Levels to watch: FTSE, DAX and Dow

European indices begin to give way, while the Dow Jones finally breaks out of triangle resistance.

Source: Bloomberg

FTSE selling off following resurgence

The FTSE 100 is selling off sharply this morning, following a two day resurgence. The failure to create a new high, followed by a break below the near-term support of 6251 sparked this selloff and I believe this is the beginning of a relatively strong move lower.

With the FOMC in view, this picture can change significantly, but I will be looking for further downside today, to move us towards 6200 and 6183 support levels.

DAX continues sideways yet downside seems likely

The DAX has seen a relatively minimal resurgence, with price failing to break back above the 10,329 resistance level. This morning has seen price tumble once more, yet much has been recovered. I see any prices between 10,303 and 10,329 as a likely area that the sellers will come back in and the failing highs seems a precursor for the lows to give way too.

Thus I am bearish unless price closes above 10,329. The 10,171 mark seems a likely support level to pull back to once more.

Dow breaks above major resistance level

The Dow Jones has managed to break above the 16,700 resistance level, bringing a greater likeliness of further upside to come. Given that we used 16,700 as resistance, it is now likely to provide support for the next leg higher. The failure to create a new intraday high is a bit of a worry and makes me feel like we are going to see a move lower.

The question is whether that will manage to hold up around 16,700 and push higher. For this reason I am bullish above 16,700, yet am weary of a possible break back into the triangle. Thus an intraday close below 16,700 would invalidate my bullish view.

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