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

Indices are recovering from a volatile week, but with US markets on a half day today and closed tomorrow, it could be a while before a clear direction is established.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-07-03T09:40:56+0100

Wall Street

Source: Bloomberg

FTSE 100 back to November rising trendline

A 4% decline from the June high has seen the FTSE return to the rising trendline from late November last year. It bounced from here in April, and, for the time being, it appears to be holding.

A move below 7280 would turn the outlook more bearish, but for now a bounce back above 7367 could open the way to the 50-day simple moving average (SMA) at 7426. A daily close below the rising daily trendline could see a test of the 7260 area, and then down to the 200-day SMA at 7188.

FTSE chart

FTSE chart

FTSE chart

DAX held above 12,350 and may bounce

Friday saw the DAX test the waters below the 100-day SMA at 12,350, but it succeeded in closing above this. If it holds above here and continues to push further above 12,400, a bounce may be in the offing. This could see a rally back to 12,500, and onwards to 12,712.

A close below 12,300 would suggest a deeper correction, with 12,180 the next potential area of support.

DAX chart

DAX chart

DAX chart

S&P 500 not moving ahead of Independence Day

The volatility of last week obscured the fact that the S&P 500 only finished around 11 points lower from Monday. The close above the 50-day SMA on Thursday is a positive sign, but with a half day today and Independence Day tomorrow, it is likely that the market will not make any significant moves.

However, the continued hold above 2400 means that buyers remain in charge, with the potential for a push back to 2450 and higher. Only a close below 2400 really changes the outlook here.

S&P 500 chart

S&P 500 chart

S&P 500 chart

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