Levels to watch: FTSE, DAX and Dow

Following yesterday’s sharp sell-off, the indices are at crucial support levels which will determine the state of play for the day.

Source: Bloomberg

FTSE sells off from resistance

The FTSE 100 sold off once more from the crucial 6237-6249 resistance zone yesterday, providing the possibility of a bearish head and shoulders pattern, which would require a break below 6006 for completion. Currently the index is breaking below the crucial 6129 support level, which would provide a bearish outlook for the day should we see an hourly close below this level.

Ultimately, it seems we are stuck within the same 6060-6237 range that dominated trade throughout March. As such, a closed hourly candle below 6129 would point towards a likely return to 6060 in the coming days.

A return towards the bottom of the range would likely then bring about buyers once more. This view would be called into question with a closed hourly candle above 6157. 

Trendline support to determine today’s DAX play

Yesterday saw the DAX falter around the 10,121 level yet again, with the index falling sharply towards a cluster of trendlines this morning. The key here will be whether the index can post an hourly close below 9760, which would likely spark another sharp move lower.

Alternately, should this support zone hold, we could see some upside from this area. As such, watch for potential intraday bullish reversal signs or else a break below 9760 to gauge today’s market direction.

Dow continues to hesitate at key support level

Yesterday’s fall in the Dow Jones has brought it down to the key 17,484 support level, which represents the April low. Much like the DAX, questions will be asked around this level and thus while another leg lower is possible if we see an hourly close below 17,484, we could also see another retracement higher from here.

With that in mind, watch out for any intraday bullish reversal signals for a possible spike. Should the market break 17,484, then 17,396 is the most notable near-term support level. 

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