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Levels to watch: FTSE 100, DAX and Dow

European and US indices flounder after a recent flight to safety. With key support levels in question now, could we see another strong move lower today?

IG Analyst

Publication date : 2017-08-10T08:53:00+0100

German stock exchange

Source: Bloomberg

FTSE 100 falls into trendline support

The FTSE 100 dropped below the key 7457 support level, pointing towards a retracement of the wider move from 7341. So far we have dropped below the 50%, with the 61.8% in view, should we break below trendline support.

In either case, as long as the price remains above 7341, this current downturn looks like a buying opportunity rather than anything to worry about.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX heading back to key support

The DAX fell into the critical 12,098 support level yesterday, with the price posting flat lining lows. A break below the 12,085-12,098 zone would point towards another strong move lower for the index.

As such, with price resuming its weakness, keep an eye out for a break below that level as an indication that the bullish price action of late has been negated. Until then, there is a good chance we could bounce from the support zone given the fact that every challenge of that area in the past fortnight have been greeting by buying.

DAX chart

DAX chart

DAX chart

Awaiting break from Dow range

The Dow Jones has been trading in a range since falling below the key 22,082 support level.

For now we await the range break, where an hourly close above 22,058, or below 21,995 will give us a bullish or bearish signal. Given the move coming into this pattern, a bearish outlook is preferred.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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