FTSE 100, DAX and Dow declines raise reversal chances

FTSE 100, DAX and Dow decline sharply, with key support levels critical to determining the outlook as we head into a long weekend.

FTSE 100 slumps into crucial support level

The FTSE 100 is on the slide this morning, with the critical 5925 level coming into view. A break below Tuesday's low would provide us with a bearish signal for the day ahead.

The consolidation seen since the beginning of April highlights the potential for this market to break lower and head back towards the 5666 region of support. As such, a decline below 5925 brings a likely bearish phase coming into play, whereas a rise through 6095 would be required to bring a more bullish outlook.

DAX breaks key support to highlight further downside

The DAX has managed to break below the crucial 10,932 support level, thus completing a bearish double top formation.

Given the wider consolidation we have seen since early-April, this is likely to be the beginning of a bearish phase as the index returns to the lower echelons of the 10,152-11,342 range. A break through the 11,250 resistance level would be required to negate this outlook.

Dow Jones declines bring key support level into play

The Dow gains seen either side of last weekend looks to have failed in its attempt to break us out of the consolidation phase that has dominated the past two months. With the index turning lower below the crucial 24,903 resistance level, there is a good chance we will see the wider consolidation continue once more with a bearish move from here.

However, we are yet to see the 24,148 level broken, which would provide the bearish breakdown signal for this index. As such, a bearish outlook would carry greater strength if we see that 24,148 support level broken. To the upside, we would need to see the 24,719 level broken to raise the likeliness of another challenge of the 24,903 resistance level.

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