Key index levels: technicals for FTSE, DAX and Dow

Despite a ramping up in sanctions on Russia by the US and the EU, markets have again taken any potentially negative ripple effects in their stride with the bulls pushing equity indices higher in early trade.

FTSE daily RSI nearly overbought

Yesterday’s M&A activity simply wasn’t enough to coax a new high, with the FTSE only managing to trade at 6721 before settling lower to close at 6700. 

Last week’s highs remained the key area for traders to watch as the FTSE gained a foothold above 6700. The 6724 level was essentially the barrier between current price action and the highs established earlier this year. A move through 6772 would cement this.

With the FTSE now moving through the Friday highs to levels last seen in early March, the daily relative strength index (RSI) is beginning to enter the overbought region. Good support comes from 6680 and the 100-day moving average at 6667.

DAX finds decent support

The DAX has also been bid higher in early trade. Having tested the 50-DMA yesterday, decent support was found just below the 9400 level. It is currently testing the 9540 level, so a break and close through here puts the index on a path towards 9645-50. The daily RSI at 55 suggests there is additional momentum left in the market.

The 9505 level and then 9464 should act as a buffer to downside.

Dow struggling to break through 16,500

Since falling below the 16,500 level last week, the Dow Jones has struggled to make any significant moves back through this level. Breaking through the 16,511 level will retarget last week’s highs of 16,570. Only then can we argue for an attack of the all-time highs last seen on 4 April.

Support comes from the 100-hour moving average at 16,470, then 16,450 and 16,400.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.