FTSE could experience pullback
The 6770 level now possesses greater importance, as a break below this would confirm a double top reversal formation on the UK benchmark. This could ultimately result in a measured move lower towards the 6700 level in time.
For now, the 6800 level is providing base support in line with the 200-hour moving average. Until we see a breach of the current range in one direction or another, the mode would be that the trend is still up for the FTSE.
16,500 level providing support for Dow
Yesterday’s price action in the Dow Jones was in a similar vein, with a lack of momentum to push the index to a close above the 16,600 point. The 16,500 level is the next support and given the Dow’s propensity to move in 50-100 point ranges upon the breakage of a support, we could head towards the 16,450-60 level and then 16,400 should attempts to break out and above this range fail.
The culmination of the 50-hour and 200-hour MAs, as well as the bullish cross, means that 16,520 is an important level in the very short term.
Markets will want to see a daily close above the 16,650 level if the usual ‘Dow at 17,000’ level hype is to come about.
Below the 16,400 is the 50-day moving average and the 16,370 level.