Equity markets are consolidating ahead of the Federal Open Market Committee minutes later this afternoon.
FTSE buoyed by intraday support
The FTSE 100 appears to have found a base at the 6670/80 level today, with yesterday’s intraday support at 6757 also helping to buoy the upside. We are now trading in a tight range unable to keep the foothold above the 6810 level in early trade. A move through the 6810 on a daily closing basis puts us on target for the highs of this year.
The daily relative strength index is also registering as slightly overbought, and at this juncture we might expect some profit-taking. A break below 6770 is likely to consolidate at 6750, with main support coming in at 6710.
DAX struggling to break through 9680
The DAX is still unable to break above the 9680 level – support comes from the 9610 with 9550 below that. A break through the top of the range brings 9730 into focus.
The one-hour chart is indicating negative divergence. Like the FTSE, the consolidation range may be running out of steam.
Dow sees 16,200 as a barrier to progress
The Dow Jones has found support at the 16,110 level, unable to break through 16,200 with any convincing momentum while capped by the 50-daily moving average. Bearish price action yesterday indicated that we may be looking for a return to 16,050, with the 100-DMA coming in below at 16,025.
The monthly chart for the Dow is interesting, as it shows the bearish marubozu candle from January has seen an upside retracement of around 50% in February. Thus, while below 16,200/45, there is a bias for additional lows in the coming days before breaking higher.
A move through here could see a big move back towards 16,414.