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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?

IG Analyst

Publication date : 2017-01-24T09:28:02+0000

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.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

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.

DAX price chart

DAX price chart

DAX price chart

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.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

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