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Levels to watch: FTSE 100, DAX and Dow

Recent gains in European and US markets are coming into question, with the DAX in particular looking like a candidate for a short-term bounce.

IG Analyst

Publication date : 2018-07-04T09:13:18+0100

Market data

Source: Bloomberg

FTSE 100 turning lower once more

The FTSE 100 is seemingly turning lower again this morning, following on from a rebound on Tuesday.

With trendline support below, a break of the 7543 support level would be a signal to say that the wider trend is back in play, with a break below 7489 expected to occur. Until that happens, there is a chance we could continue the gradual ascent seen this week.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX could be forming a short-term bottom

The DAX has been in consolidation mode throughout the week, with yesterday’s rally into the 12,441 resistance level pointing towards the possibility of a bullish short-term outlook coming through.

An hourly close above that level would point towards gains, following a sell-off into the 76.4% retracement of 12,054. Until then, we are seemingly back on another short-term move lower. Yet with the recent shift into higher highs and higher lows, we would need to see a break below 12,130 to bring the bearish outlook back into play.

DAX chart

DAX chart

DAX chart

Awaiting Dow break amid recent consolidation

The Dow Jones has been exhibiting lower highs and higher lows, with the index consolidating in the wake of a pullback into the wider 76.4% retracement at 23,977.

Much like the DAX, there is a decent chance of a bullish phase coming into play, yet we would need to see a break above 24,467 for that to become relevant. Until then, watch for the short-term picture and whether we can continue to find support on the 76.4% retracement at 24,141. A break below 23,992 would signal a continuation of the recent downtrend.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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