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Levels to watch: FTSE 100, DAX and Dow

European markets are pulling back at the open, raising the risk of a more bearish phase. Meanwhile, the Dow trades at a key resistance level, which could signal the beginning of a more bullish period if broken.

IG Analyst

Publication date : 2018-04-16T09:00:12+0100

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FTSE 100 dropping at open

The FTSE 100 looked likely to break higher this morning following a positive start to the day in pre-markets. However, with oil prices tanking, we are seeing the FTSE 100 dropping below trendline support, pointing towards a possible bearish shift for the index.

Given the move below that trendline, the key level to watch comes at the 7240 swing low. An hourly close below there would point towards the beginning of a more protracted retracement, with the 7100 region of particular interest. With that in mind, watch for a possible near-term recovery or else a bearish signal coming into play below 7240.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX pullback could be short-lived

The DAX is in retracement mode, with early losses coming into the 61.8% Fibonacci level.

This index has been a strong outperformer of late, and it is likely that we will see the price push onwards and upwards again before long. Look out for another move to the upside from here, with a break below 12,395 required to negate this bullish outlook.

DAX chart

DAX chart

DAX chart

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Dow rally brings price into crucial resistance level

Last week saw the Dow Jones rally into the 24,626 swing high, with the price consolidating ever since. This level, along with the existence of a descending trendline point towards the index being at a pivotal moment.

A break and hourly close above 24,626 would signal a more bullish shift after a period of downside. Conversely, should the index fail to break above 24,626, we could be looking at the turning point where sellers come back into dominance.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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