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Levels to watch: FTSE, DAX and S&P 500

Friday saw a recovery in risk appetite, but so far there is little real follow-up in the beginning of the week.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-04-10T09:24:05+0100

Data trader

Source: Bloomberg

FTSE 100 needs to keep the momentum going

As noted on Friday, the bulls have managed to hold the FTSE above 7260, but now need to clear the 7363 area to maintain momentum. Friday saw them post a strong rebound, but upward strength is fizzling out around the 7360 zone.

A close above 7363 clears the way back to 7400 and higher, and ends the drift lower. A failure to push on raises the prospect of a move to 7260, but only a break through there moves the outlook from consolidation to correction.

FTSE chart

FTSE chart

FTSE chart

DAX remains bullish

Last week was interesting for watchers of both momentum and technical analysis. DAX pushed to a new two-year high, and within a whisker of a new all-time high. It then dropped back but found support at a previous high, 12,179, and then rebounded.

Friday’s price action saw the index break the short-term trendline lower from the April high, so now the bulls need to push to the 12,316 high from 5 April, and 12,393 from the beginning of last week. A failure here raises the risk of a move to 12,179, with a daily close below here opening the way to 12,032 and then 11,893. Only a daily close below this last level breaks the bullish trend.

DAX chart

DAX chart

DAX chart

S&P 500 in defence

It was ‘honours even’ last week for both buyers and sellers on S&P 500. The former managed to prevent further downside by defending the 2340 area, but the latter held the falling trendline off the all-time high.

We need to see a close above 2375 to break this trendline, otherwise further losses could be in order. In the event of a push lower this week the potential support levels remain 2340 and then 2321. The loss of the latter, and a daily close below it, would be a very bearish development, raising the prospect of a move to 2303 and then 2280.

S&P 500 chart

S&P 500 chart

S&P 500 chart

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