Levels to watch: FTSE, DAX and Dow

After losses yesterday indices are looking to recover, but so far the bounce appears fairly limited in scope.

US trader
Source: Bloomberg

FTSE 100 fails to recover ground
Yet again the area around 6080 held the index up, as it had done on 29 March and 1 April. However, the overnight bounce failed to recover much ground, and with the daily RSI trending lower it looks as if bounces will continue to be sold.

A break below the 6070/6080 area would push the index on towards 6000 and the ECB-day low, with a bigger drop pushing us back down towards 5917 and the third weekly support level. A bounce needs to clear 6150 to raise the prospect of yet another move towards 6220. 

DAX looks to rally
Yesterday’s steep drop put the index at its lowest level since mid-March. Today will likely see a modest rally, but so long as the price holds below 9700 the bounce is likely to be short-lived.

A break below yesterday’s lows around 9520 will then suggest a drop towards 9400, and then on towards 9425 if downward momentum accelerates. A bounce must get back through 9800 soon to indicate that a turning point has been reached.  

Dow movement in the balance
Having suffered modest losses over the past two sessions, today may see some buyers return to the index, emboldened by the prospect of Federal Reserve minutes later in the session.

The outlook here seems much more difficult to call than for the FTSE and DAX. A break below 17,600 would ignite the possibility of a drop to 17,400 and then potentially the 200-day simple moving average (currently around 17,100).

If 17,600 holds then a bounce back to the high above 17,800 could materialise, but a close above this level is needed confirm that the upward move is back. 

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