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Key index levels: technicals for FTSE, DAX and Dow

A strong day for global markets has given way to quieter trading, but with US GDP, a Federal Open Market Committee meeting and ADP numbers up today there is plenty to motivate markets.

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FTSE finds support from 6730

The move through the 6771 level for the FTSE, as Shell takes the top of the index, sets the benchmark in good stead for additional upside. The daily relative strength index is looking slightly overbought so a small retracement may be in the offing on the back of recent gains. Making a break through the 6800 level may be a little too much for now (the 78.65 Fibonacci retracement from the February to March high lows).

Oversold in the short term too, price action is also hitting the top of the one-hour channel from the 11 April lows, so on the intraday we can possibly expect to see a retracement to 6745.

Good support comes from the 6730 then 6700 below that.

Any moves above 6800 would herald a test of the 6830 level.

DAX still struggling with 9600

The 9600 continues to be the sticking ground for the DAX, yet the bids are coming in at 9560. Any moves below this intraday support take us back towards 9530. A move through the round number would put the bias on a test of last week’s highs around 9647 – so for the most part it’s a rangebound move until one of the bands break. A push through 9647 could support a measured move to 9721.

Dow could test recent highs

For the Dow Jones, price action has been flattening and we haven’t made a great deal of progress in the past four months as the index trades in a fairly benign 600-point range. The weekly RSI is indicating negative divergence, and this has been a reliable signal in the past for a correction to the downside.

On the daily chart, price action is supported by the 50-day moving average at 16,350, so this area will need to hold if the market is to drive higher. A move through the 4 April intraday highs will aid a bullish momentum.

On the intraday, the 16,480 level acts as support while gains from yesterday’s upside were capped at the 16,560 level. Even if this level was broken, further resistance lies at 16,578. The rising 50- and 200-hour moving averages suggest this market is in the mood to test recent highs, particularly if the Federal Reserve opts to not throw any obstacles into the road.

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