Levels to watch: FTSE, DAX and Dow

A poor US session sent indices lower, with signs that further losses may be on the way.

Wall Street
Source: Bloomberg

FTSE 100 facing losses

The bounce on the FTSE has been firmly knocked back, with the price slipping below the 7492 level, identified yesterday as a crucial determinant. Some support is provided at 7448, which held back further falls overnight, but a loss of this level would suggest a drop back to 7385, where the index bounced twice in June.

Three attempts over the past two weeks to break the area around 7550 have been defeated, so this is the zone that bulls need to break to reverse the bearish outlook.

DAX about to test 12,550

The breakout to new highs from yesterday’s session on the DAX has not been followed by further buying.

It looks like we will see another test of the 12,550 area that acted as support over the past month or so. Below this is 12,517, and then down to the 12,400 area. 

S&P 500 in a summer consolidation

The S&P 500 has fallen back from all-time highs, but this is not an unduly worrying sign. Momentum is still declining on the daily chart, but with the intraday chart looking oversold, a bounce is possible, even if it fizzles out at 2446 or 2450.

Overall, this index is still stuck in a summer consolidation, with signs of exhaustion in market breadth indicators. 

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