Levels to watch: FTSE, DAX and Dow

A weakening pound pushes the FTSE higher, yet with the FTSE, DAX and Dow all at key resistance, there is a major challenge up ahead.

New York Stock Exchange trader
Source: Bloomberg

FTSE rallies back into range top

The FTSE has been incredibly predictable this week, with the July range of 7300-7386 holding up in a very consistent manner. With dovish comments from Bank of England’s (BoE) Ben Broadbent, we are seeing weak pound drive the FTSE back into the crucial 7381-7392 resistance zone.

Should we post an hourly close above 7392, then this could point towards a breakout in play. However, until that happens there is a good chance we will see the sellers come in once more from here.

DAX attempting to break through key resistance

The DAX is back at the May/June double top and July double bottom neckline. Clearly given the existence of both those necklines, a break higher from here would be highly notable.

Such a break would point towards a potential double bottom projected target of 12,681. The interesting thing about that projection is that it falls short of the 12,735 swing high. With that in mind, a break higher from here would look like a retracement of the sell-off from 12735 and thus we could still see further downside. However, for now, we are watching intraday charts at this crucial resistance levels for it could bring us a spike higher or potential pullback.

Dow heading back into trendline resistance

The Dow Jones is consolidating after a highly volatile US session yesterday thanks to Donald Trump Jnr. For now, we have a clearly defined trendline that continues to hold. A break and hourly close above 21,441 would point towards a bullish resurgence.

However, until then we have a good chance of weakness at trendline resistance and thus shorts around trendline resistance, with stops above 21,441 look attractive for a short-term move back into the 21,400 region.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.