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Levels to watch: FTSE, DAX and Dow

European and US indices have been moving lower in recent days, yet with clear uptrend in place, this could provide a buying opportunity.

IG Analyst

Publication date : 2017-06-22T10:21:17+0100

Chart

Source: Bloomberg

FTSE falls back into 76.4%

The FTSE managed to rally from the 76.4% Fibonacci retracement yesterday. However, on the hourly chart it is clear that we have still been creating lower highs, and this has come back to haunt the FTSE, with trendline resistance holding once more to drag the market lower at the open.

With the price having dropped below yesterday’s low, the short-term downtrend remains in place. However, until we see a break below the 7377 mark, this still looks like we could reverse higher given the wider uptrend and this week’s break through 7552.

FTSE chart

FTSE chart

FTSE chart

DAX approaches key Fibonacci support

The DAX looks to be heading lower this morning, following a period of consolidation overnight. However, there is reason to believe that this weakness will be shortlived, given the push through 12,923 on Tuesday.

However, with the price having broken to a lower low before that, there is a somewhat mixed picture in play here. Nevertheless, with the wider uptrend, coupled with the fact that you can get a good risk to reward, it makes sense to look for longs around the 76.4% level (12696). A break below 12,617 would negate this.

DAX chart

DAX chart

DAX chart

Dow hits trendline support

The Dow Jones has pulled back from its uptrend this week, with the price having moved into trendline support overnight. There is no doubt that we are looking at a highly trending market, and as such the expectation is for that trend to continue. For that to occur, we would need another move higher rather than a break below 21,306.

Whether this trendline holds or not remains to be seen, yet with the 61.8% retracement also joining the trendline, this looks like an interesting area for longs.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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