Levels to watch: FTSE, DAX and Dow

A short-term retracement in global indices appears to be giving way to yet another move higher to cap off a strong week.

A man looking at charts
Source: Bloomberg

FTSE finds SMA support

The FTSE drifted lower in the latter half of the trading day yesterday, with the price pulling back to the 100-period simple moving average  (four hour) at 6312. The long lower shadow on that spinning top candle pointed to a possible short-term bottom, and we have since seen the price move higher. This upside is likely to persist to create a new high today, in line with the uptrend seen throughout the week. Thus the bullish sentiment remains with resistance levels worth watching at 6356, 6368 and 6396. Should the price close below 6312, then this could provide the possibility of a stronger move lower with support levels at 6300 and 6249. Yet for now the bullish view remains.

DAX wedge brings further upside

The retracement seen in the DAX yesterday was not a surprise, following a strong move higher throughout Wednesday. However, the surprising thing was the move back below 11,058 support which was a highly notable level. Nevertheless, we have seen the price form a countertrend falling wedge pattern which has subsequently been broken. This is a great continuation pattern and as such, further upside is likely, with near-term resistance levels at 11,152 and 11,166, followed by the more extended 11,318. For a more bearish view to emerge, a close below 11,032 would need to occur, which would then look towards 11,000, 10,978 and 10,892 as the next support levels. 

Dow pushes higher once more

The Dow Jones has a similar look to the FTSE, with the price retracing back to the 100-period SMA (four hour) yesterday. Also like the FTSE, the Dow has subsequently seen a gradual move higher which has picked up pace this morning. There is a clear uptrend in play throughout the week and this looks a lot like another leg higher in the making. With the price currently at yesterday’s high, a close above 17,805 would be a good bullish indicator that would likely lead to further upside. Resistance levels for any break higher would be at 17,844, 17,924 and 17,978. Meanwhile, the price would need to close below 17,686 to then look towards 17,608 and 17,549 as the next support levels.

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