Technical Analysis: key levels for FTSE, DAX, Dow

Upward progress is still lacking in most markets, with low volumes leading to directionless trading.

Frankfurt stock exchange

6700 supporting FTSE

Yesterday’s price action saw the FTSE 100 touch 6700 for the first time in two months, but the bounce off this level shows that it is acting as strong support.

However, bulls should wait until the Thursday high of 6753 is broken before it can be said with certainty that the next bounce is underway. Even then, 6800 and then 6880 will cap the upside potential for the time being.

The downside scenario would come into play if 6700 and the 200-day moving average is broken, with 6500 a potential target in the medium term.

Buying pressure still present in DAX

The Germany 30 needs to hold the 50-DMA if the scenario is not to switch from bullish to bearish. However, the bounce yesterday from 9744 suggests that there is still buying pressure that will lift the index.

A close back above 9900 in the coming sessions would be viewed as remarkably bullish and would clear the way for another run above 10,000, which still seems to be the default scenario.

A drop through the 50-DMA and then 9744 would open the way for a move down to 9500 and the 200-DMA, but the upside outcome is still the more likely at present.

Dow targets 16,900

US indices are slightly weaker again this morning, but this is understandable at the end of the week and with the end of the quarter looming.

The stronger finish off the lows for US indices suggests that there is appetite to move higher from here. The hammer candle from yesterday is a sign that the uptrend in the Dow Jones has not run its course just yet. The journey is likely to be choppy, but 17,000 is still the apparent destination.

Short term, the target is 16,900 and then 17,000, with the Thursday low around 16,740 support on the downside.

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