Levels to watch: FTSE, DAX and Dow

Markets have failed to establish a clear direction in recent sessions, and today has been no exception. Early gains have evaporated, although the buyers continue to step in around key levels.

Man walking past charts
Source: Bloomberg

FTSE could fall to 200-DMA

Although dropping back this morning, the FTSE 100 has yet to breach 6740, a level that has supported the index throughout the week. For the time being bears will have to wait for a clear break of this zone, which would open the way to the 200-day moving average at 6680.

This week’s price action reminded us that 6900 is the big level to break on the upside and for the moment it looks like the index is not able to muster the strength. Interim resistance may also be found at 6850.

DAX runs out of momentum

What had threatened to be a possible breakout to the downside yesterday for the DAX turned into a strong move higher that took it back to 10,800.

However, we have run out of momentum again this morning, establishing 10,800 as the major level on the upside that must be broken before further gains are possible.

The 10,600 level continues to be support in any dip lower, with buyers stepping in over and over again to hold this level. A close below here would be bearish, although the hourly uptrend is still yet to be tested.

Dow gains capped

Gains on the Dow Jones continue to be capped by a downtrend off the December highs, but dips below 17,200 continue to be bought for the time being. Whether this will weaken once the month-end is out of the way remains to be seen, but the 17,100 area, the low from December and also around the 200-DMA could well halt any major selling below this point.

The 50-DMA around 17,690 is going to be the first target for any rally, although there is little sign of one developing at present.

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.