Levels to watch: FTSE, DAX and Dow

Having seen indices rebound throughout this week, buyers are looking to begin the final session on a good note.

A man looking at a data board
Source: Bloomberg

Fed minutes last night did much to knock down the idea that 2015 is still a possibility for a rate increase. They are not able to say it themselves, but it seems clear from the language of voting members that this year will slip by without a move on interest rates. With $2.5 trillion ‘wiped on’ to global markets this week as equities rally, the bulls can be pleased with their work. October has got off to a flying start, but there is still much lost ground to recover.

FTSE rally could carry it to 6473

Yesterday morning’s weakness saw support come in at 6300, with a bounce carrying us to fresh multi-week highs. Despite the occasional dip, this rally has been very rewarding for patient bulls, who will be watching the 50-hour SMA at 6376 as a possible area for any support should the index falter early on today. Further upside is possible, with targets around 6473 and then 6600. A move through 6340 would suggest that the bounce has run its course, with a target on the downside around 6254 and then onwards to the 200-hour SMA at 6195. 

DAX off morning highs but remains in positive territory

Each time the DAX seems to weaken, it comes storming back. Today has seen the index come off the early morning highs in futures, but as with the FTSE 100 I would not be unduly perturbed to see a move back towards 10,027, the 50-hour SMA, the indicator where support came in yesterday and on 8 September. The DAX is still yet to meaningfully challenge the September highs around 10,300, and so the 50-day SMA at 10,308 remains the natural target. The 10,000 level still remains the key line, with a close below here signaling that gains have come to an end, with downside targets around 9833 and then 9757. 

Dow likely to find resistance at 17,273

The move back above 17,000 last night put the index on course for its best week in months. Having breezed through a number of resistance levels the question now is what will drive us higher. Further resistance is likely around 17,273 and then 17,465. A move back down would target the 50-day SMA at 16,700. This would put the market back inside the September range, with little support to hold the index back before 16,150. 

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