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Levels to watch: FTSE, DAX and Dow

The sellers have taken control once more, with indices under pressure in early trading this morning.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-04-04T10:04:05+0100

Wall Street

Source: Bloomberg

FTSE 100 bouncing back

Three days of losses took the FTSE to the 7260 support level yesterday, where a bounce developed and saw the index holding above the 50-day simple moving average (SMA) at 7292.

Short-term, bears have to break 7350 and then 7385 to indicate the trend downwards from Thursday’s peak has reversed. A drop below 7260 is still required to really give the bears room for manoeuvre, which could lead to a test of 7150 or even 7000, near the 200-day SMA. A push back to 7380 and higher would raise the prospect of a move back to the all-time high at 7448.

FTSE chart

FTSE chart

FTSE chart

DAX slowing down

Yesterday DAX saw a swift drop from the two-year highs, but those of a bearish disposition should avoid cracking open the champagne just yet.

We would need to see a close back below the previous high of 12,180 to paint a more bearish picture, and even then the steady rising trend would only be negated by a close below 11,850. On the hourly chart a bounce would need to clear the 50-hour SMA at 12,290 to indicate more bullish momentum is coming through.

DAX chart

DAX chart

DAX chart

Dow looking for support

US markets staged a late comeback last night, but it looks increasingly like a new lower high has been established on the Dow Jones.

Short-term support could be found around 20,500 or at the 27 March low of 20,400, with a break below this likely to be the real bearish development. This would open the way to 20,000 and then 19,676, the low point of the year thus far. Bulls will need to break the descending trendline off the all-time high, which would imply a daily close above 20,800.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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