Levels to watch: FTSE, DAX and Dow

A sharp sell-off for European and US indices is a reflection of risk-off sentiment permeating through financial markets this week. With key support levels in view, will this sell-off continue?

US trader
Source: Bloomberg

FTSE sell-off gathers pace

The FTSE has managed to break lower from not only its range, but also trendline support. It looks like we are seeing a retracement of the rally from the 6767 swing low, pointing towards a possible bounce from the 6852-6876 mark. We have seen no bullish reversal signs and thus for now there is a strong likeliness we will see further downside.

However, we would need to see a break below the 6767 level to negate the medium-term uptrend. As such, be aware we could see a bounce around the corner. 

DAX plummets past 76.4% retracement

This week has seen substantial selling pressure for the DAX, with price falling back below the 76.4% retracement. Much like the FTSE, we have a clear uptrend in play over the past month and we would need a break below 10,347 to negate that.

As such, it is worth noting the possibility of a bounce. However, much of that will be down to political considerations. 

Dow trading in crucial support zone

The Dow Jones has tumbled sharply into the 17,907-17,956 support zone, hitting a 50-day low in the process. The biggest level of note is at 17,907, where a break below could spark a substantial sell-off.

However for now it is worth noting price could find a bounce given the importance of this support zone. The short-term downtrend is clearly defined, yet it makes more sense to either await a bullish intraday reversal sign or a closed hourly candle below 17,907 for the next move. 

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