Levels to watch: FTSE, DAX and Dow

Indices stage a fightback following a strong selloff yesterday. However, given the creation of new lows, could this simply be a precursor to further losses?

German stock market
Source: Bloomberg

FTSE seeing brief resurgence

The FTSE 100 is moving higher, off the back of a major selloff yesterday, which took price through an ascending trendline dating back to August.

This is clearly a continued bearish sign and despite the upside we are currently seeing, further selling is likely, with support levels of 6070, 6048 and 6024 in view.

Should we see a closed hourly candle above 6174, then a more bullish outlook would return, where 6197, 6209 and 6249 are the next resistance levels. 

DAX likely to selloff once more

The DAX has also been selling off heavily, with yesterday’s daily candle closing perfectly on the 10,524 support level.

However, we have seen price trade below that level for some time yesterday and thus further downside seems likely. Upon breaking lower, support levels of 10,448 and 10,378 would be worth noting.

Conversely, a closed hourly candle above 10,726 would bring a more bullish view with 10,630 and 10,805 the other resistance levels of note.

Dow regaining losses

The Dow Jones is also taking back some of yesterday’s losses following what was a very volatile days trading. Price is currently pushing higher off a new base, yet there is a good chance that the bears will come back into play before we regain yesterday’s peak.

Given the volatility seen yesterday, the key resistance level of 17,769 is very far from current price action, thus making it difficult to trade.

In accordance with the European markets and the fact that we saw a new three-week low yesterday, another move lower seems likely. However, that would be a case of watching for bearish intraday reversal signals amid this current move higher.

Support levels of note are 17,421 and 17,399, whereas resistance levels of 17,608, 17,637 and 17,655 and the nearest to the upside.

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