Levels to watch: FTSE, DAX and Dow

Yesterday’s choppiness has made for a more mixed picture in indices, and with one bullish, one neutral and one bearish view, something has to give for the markets to all come back into sync.

US trader
Source: Bloomberg

FTSE back from the brink

The FTSE 100 has managed to sustain price action above the crucial 6809 support level which needed to be broken to negate the bullish outlook mentioned yesterday.

With this rally coming into trendline resistance, the signal that would provide us with further confidence to this bullish outlook would be an hourly close above yesterday’s high of 6886 given this would necessitate a trendline break. An hourly close below 6809 would negate this bullish view.

DAX bounces after sharp sell-off

Yesterday was a particularly choppy day for the DAX, with price selling off sharply to 10,388, marginally below the crucial 10,410 support level. This failed to hold and ultimately, we have seen a decent recovery since. Given the fact we did not see an hourly close below 10,410, a bearish view is not in play.

However, the fleeting move below this level is certainly a warning sign and points towards the potential for a move lower once more. We would need an hourly close back above yesterday’s high of 10,659 to provide more confidence of the bullish view. Meanwhile, an hourly close below 10,410 would provide a bearish outlook for the index.

Dow respecting trendline resistance

The Dow Jones continues to respect the descending trendline of a triangle which was negated yesterday with a break below 18,490. Given that break lower yesterday, it is likely we will see the index turn lower to continue the weakness evident yesterday.

With that in mind, a bearish short-term view is in place unless we see an hourly close above 18,585.

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