Levels to watch: FTSE, DAX and Dow

The FTSE and Dow find themselves at key crossroads, with both finding support on major historical levels. Will they bounce or continue their recent descent?

Data board
Source: Bloomberg

Will FTSE support hold?

The FTSE managed to bounce from the crucial 7130 support level yesterday, with price rallying into the 7176 level time and time again. We would need to see price break from this current decision zone for a signal of the next move. That means an hourly close below 7130 would provide a bearing continuation signal.

Conversely, an hourly close above 7176 would point towards a rally into the 7200 region. We would subsequently require a break through 7222 to signal an end to the recent downtrend.

DAX turning lower once more

The DAX is on the turn once more this morning, following a sharp rally from the 11,521-11,531 support zone yesterday. The range evident over the past three weeks remains relevant, yet the continued creation of lower highs is a worry for bullish positions.

As such, greater bullish confidence comes with a break through 11,607. Conversely, a break back below 11,500 would look like we could move back into the 76.4% retracement 11,471.

Dow consolidates following potential reversal signs

The Dow Jones is continuing to consolidate following the rally through both trendline and horizontal resistance on Friday. Given this challenge to the recent downtrend comes following a failed follow through on a double top formation, there is a good chance we could start to see a bullish reversal come to fruition.

For a bullish outlook to come into play, we would need to see an hourly close above 19,848. Conversely, an hourly close below 19,720 would point towards another shot at following through on the double top pattern.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts