Levels to watch: FTSE, DAX and Dow

As the US dollar powers on to levels last seen back in July 2013 we are still seeing signs of caution in equity markets.

A man looking at a chart
Source: Bloomberg

The EU sanctions against Russia come into effect today and investors are likely pondering the retaliations that may follow.

Scottish referendum jitters are still the order of the day, and while concerns mount on the back of not one but two polls suggesting the ‘Yes’ camp may swing it, we can expect some rangebound moves on UK indices.

FTSE anchored around 6800

The FTSE is still unable to keep a toehold above the 6845 level and is now anchored around the 6800 region. The UK benchmark dipped as low as 6770 yesterday but the 100-day moving average proved an admirable support metric, coinciding with previous support at 6780.

The 6830 level and the crossing of the 50- and 200-hour moving averages on the one-hour chart are calling gains for now. Any drop back through 6804 targets the 6780 level once again.

9800 still hindering DAX 

As is becoming the norm, the 9800 level is still the resistance point for the DAX, and with the rising trendline support coming from the June 2012 lows at 9700 the question remains which level will break first.

A fall through support would target the 100-DMA at 9660 with the 9605 level coming in under that. A rise and a daily close through the 9800 level takes us towards 9874.

Dow could trade sideways

Last week’s highs on the Dow Jones have yet to be tackled and as long as the index remains below the 17,100 level, we may see some downside in advance of any new high. The current range sees 17,018 at the base and 17,160 at the top. Thus we could expect a measured move should the market decide to challenge the range metrics.

The diverging relative strength index on the daily chart suggests that we could see sideways trade at best for the coming days.

A move back through 17,000 would target the 50-DMA at 16,910.

A rise through the top would see the Dow make inroads towards 17,300.

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