Levels to watch: FTSE, DAX and Dow

Ahead of Super Thursday from the Bank of England, global indices have pulled back in anticipation of a hawkish stance. Yet the question is whether this is simply temporary or something bigger.

Outside the Bank of England
Source: Bloomberg

FTSE resistance holds

Yesterday saw the FTSE selloff once more from the 6455 resistance level that has capped three out of four occasions this October. Crucially, the price has broken back below 6392, which is a worry. The question now is how far this rally can last, given the existence of resistance at 6415. A close above 6415 would bring confidence of further upside, with resistance at 6429 and 6455 the notable levels. However, a move back below 6384 could lead to strong selling, where support levels to watch are at 6376, 6356 and 6344. Be aware of the BoE event this morning for fundamental event risk.

DAX sells off at trendline

The DAX has been consolidating overnight following a strong selloff from trendline resistance yesterday. Given that this sideways price action follows a selloff, the current price action looks more like a brief respite before further selling. For any upside, key resistance levels come in at 10,882, 10,925 and crucially 11,000. The inability to regain 11,000 would point towards losses back down towards trendline support (currently 10,770) and possibly onwards to 10,726 and 10,684. A closed candle below 10,832 would provide bearish a signal.

Is Dow dip a minor blip?

Yesterday’s weakness in the Dow Jones has simply brought the price back to the 20-period (four hour) SMA, which has provided support on a number of occasions. The market remains within a clear uptrend and as long as the price doesn’t move back below 17,768, it is likely that another move higher is around the corner. Thus bullish outlook remains while the price is above 17,768, with resistance points in view at 17,982, 18,000 and 18,111. A close below 17,768 would look towards support at 17,686, 17,608 and 17,549.

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