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Levels to watch: FTSE, DAX and Dow

The FTSE looks to maintain its bearish trend for the week, with DAX and Dow both turning lower at the same time.

IG Analyst

Publication date : 2017-01-19T09:15:08+0000

Traders in a New York stock exchange

Source: Bloomberg

FTSE falling out of wedge formation

The FTSE is moving lower once more following a rebound back up to yesterday’s high of 7258. The resulting wedge pattern is typically bearish and that appears to be playing out. Given the sell-off we have seen since Monday’s top, there is a good chance we are seeing a reversal in fortunes for the FTSE, with sterling also starting to look more bullish.

Confirmation that we are set on another leg lower would come with an hourly close below 7215. Should that occur, then a bearish outlook would be in place unless we break back above 7260.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX selling off from resistance zone

The DAX has turned lower, following a rally towards the key 11,636-11,646 resistance zone. This morning’s drop through 11,604 provides a bearish outlook, with the range looking likely to persist. As such, further downside looks likely here, with a move back down to the 11,540 region seemingly on the cards.

A break back above the 11,646 region would be a warning sign, yet ultimately we would need to push back above 11,696 to look like we are set for a breakout. That being said, when the breakout does come, it is expected to be a bullish, given the wider trend coming into this consolidation.

DAX price chart

DAX price chart

DAX price chart

Dow looks to move lower once more

The Dow Jones dropped back through the crucial 19,769 level yesterday, continuing the bearish trend that have been in place over the past 10 days. With the index turning lower and the recent trend in place, there is a good chance we will see further downside to come for the Dow, with 19,720 the next important level to the downside.

A break below there would create a hugely significant double top formation. We would need to see an hourly close above 19,856 to negate this bearish view.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

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