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Levels to watch: FTSE 100, DAX and Dow

Despite recent gains, tentative bearish signs are coming into play for European and US indices.

IG Analyst

Publication date : 2018-07-12T09:12:22+0100

Data

Source: Bloomberg

Will FTSE 100 rebound last?

The FTSE 100 rebounded back into the 7623 mark overnight, respecting the 7569 support level. Given the wider 7543-7706 range in place over the past month, there is a chance we could see another move lower to reach that 7543 level.

However, the key to whether we will break higher without reaching that support level is down to whether we see a break above 7623 or not. As such, a push below 7569 would point towards a short-term move into 7543 support, whereas a rally above 7623 would signal a return to a bullish short-term outlook.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX looks set for another move lower

The DAX is rolling over again this morning, following a rebound overnight. This looks like a retracement, with further downside likely to bring us into the 61.8% Fibonacci level at 12,308.

A break and hourly close below 12,390 would provide greater confidence of that next move lower for the pair. While further downside looks likely in the near term, this is perceived to be within a wider bullish rebound. As such, the index is expected to turn higher soon enough, with a break below 12,102 required to negate that idea.

DAX chart

DAX chart

DAX chart

Dow wedge could spell trouble

The Dow Jones came under pressure earlier in the week, following on from a strong symmetrical triangle breakout on Friday.

With the index struggling to regain ground lost on Tuesday, we are seeing the index trade within a bearish rising wedge formation. This could spark a stronger move lower, where an hourly close below 24,664 would provide that near-term sell signal.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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