Levels to watch: FTSE, DAX and Dow

As we get closer to the European Central Bank meeting, upward progress in equity markets is becoming harder and harder. Indeed the rangebound trading that has characterised the day so far is likely to remain a fixture for the rest of the session.

Trading data on a screen
Source: Bloomberg

Ahead of the ECB meeting on Thursday we seem to be condemned to a day of fleeting gains and losses. The DAX is showing a reluctance to move beyond 9960, while for now the FTSE 100 sits just slightly in the red.

ADP numbers from the US will enliven the session to some extent, even if their value in predicting Friday’s NFP number is somewhat limited. The chancellor’s autumn statement is not expected to significantly move the market, although, given the surprises in the budget earlier in the year, there is always a chance that something might transpire. 

Ahead of the ECB meeting on Thursday we seem to be condemned to a day of fleeting gains and losses. The DAX is showing a reluctance to move beyond 9960, while for now the FTSE 100 sits just slightly in the red.

ADP numbers from the US will enliven the session to some extent, even if their value in predicting Friday’s NFP number is somewhat limited. The chancellor’s autumn statement is not expected to significantly move the market, although, given the surprises in the budget earlier in the year, there is always a chance that something might transpire.

FTSE unable to clear 6750

Yesterday’s big move for the main London index restored some of the bullish momentum, and also neatly underscores how damaging the weakness in oil, gas and mining has been to the index’s attempt to rally.

Despite the strength seen on Tuesday, the index is still unable to clear 6750, and thus the upside looks limited. If it did succeed in a close above this level then 6770 and 6805 become targets. Meanwhile, downside support at 6650 is still in place, followed on by the 6600 area.

The hourly chart showed a near-perfect bounce from the 200-hour moving average this morning, and with the hourly relative strength index no longer overbought the way is clear for another attempt on 6750.

DAX stuck in 100-point trading range

The 100-point trading range on the DAX that has prevailed since Thursday remains intact here, with no repetition so far of yesterday’s move above 10,000.

The price action sees the Germany index clinging on to the 50-hour MA, as the waiting continues for the ECB tomorrow. Any move above 10,000 still needs to consolidate above 10,050, while downside support is likely around the 200-hour MA at 9875.

Dow breaks fresh record

A fresh record on the Dow Jones last night emphasises just how strong this rally is. Buyers brave enough to step in during Monday’s mini selloff did well, but until we see a close above 17,900 it’s hard to envisage the index shaking off its current indecisive pattern.

First-line support is likely at 17,815, around the 200-hour MA, and then the next stop is 17,780, followed by 17,720.

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