Levels to watch: FTSE, DAX and Dow

Yesterday’s sharp sell-off has abated, with indices now seeking to regain ground to end the week.

Data board
Source: Bloomberg

FTSE bounces from key support level
The index has reversed higher once more from the 6060 support level which underpinned price over the past two months. Typically we have seen any such bounce rise to the 6220-6237 region and thus there is a good chance we could see a more bullish phase should this persist.

Having passed through a number of near term resistance points, the next hurdle would be at 6136. With the market well overstretched and stochastic highly overbought, there is a good chance we could see a pullback soon.

Thus it makes sense to either await a break above 6136, or else looking for a potential long upon a pullback. A bearish view would be taken with a break through 6060.

Awaiting a triangle breakout for DAX
The DAX is showing a clear inability to break out of this current symmetrical triangle formation, with long upper wicks into the 50-hour SMA highlighting a possible retracement lower.

Ultimately, we will take our lead from the breakout, with a closed hourly candle above 9964 indicating a bullish outlook for a move back towards the 10,121 region, or a closed hourly candle below 9760 for expectations of a strong sell-off.

Dow at crucial crossroads
The index has seen a strong move higher overnight, with the index currently attempting to break through 17511 and trendline resistance. A strong closed hourly candle above this level would point towards the possibility of further gains this morning.

However, given that we are at such a key junction, this break needs to occur to negate the downtrend we have in place currently. Key resistance levels above 17,511 are found at 17,637 and 17,761. Meanwhile support levels of note are at 17,415, 17,396 and 17,328.

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