Levels to watch: FTSE, DAX and Dow

The indices begin to drift lower, with a breakout required to highlight whether we are in a sideways phase or going to see losses to close out the week.

US trader
Source: Bloomberg

FTSE challenging double top neckline

The FTSE is selling off this morning, with the price back at the crucial 7404 support level. The ability to post an hourly close below that level will determine the outlook for the day.

 A failure to do so would point towards a period of sideways consolidation, with 7431 and 7441 the near-term resistance levels to watch.

DAX heading back towards key support level

The DAX is also seeing some weakness in early trade, with the price heading back into the 12,614 support level. The break and hourly close below there would point towards a potential move back to the 12,541 support level.

Until we see that break below 12,614, we also have the possibility of a sideways consolidation. Ultimately for the recent gains to look like they will have a knock-on effect for the longer outlook, we would need to see a break through 12,735.

Dow begins to weaken after failed attempt at new highs

The Dow Jones is drifting lower following an attempt to break through to a new high overnight. We now find ourselves trading within a symmetrical triangle formation, where an hourly close above 21,583 (bullish) or below 21,510 (bearish) will determine the short-term outlook.

We look likely to return higher once more before long, yet given the sharp rally seen earlier in the week, we could see some form of retracement lower in the event that we break below 21,510 support.

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