Levels to watch: FTSE, DAX and Dow

Yesterday’s mixed session has given way to small gains this morning, although weakness in German factory-gate prices has led to some caution. 

A man looking at a candlestick chart
Source: Bloomberg

6340 stemming moves lower

Yesterday we saw the FTSE surrender its hold on 6400, but the downside was capped by 6340, which stumped two attempts to ignite a significant move lower. A break through this level, with a daily close below it, should mark the beginning of a more sustained drop for the index, potentially towards 6313 and then 6287. A recovery back above 6380 would signal that bullish momentum is returning, although we will need to see a daily close back above 6400 to suggest that this short-term consolidation has resolved itself to the upside. 

DAX targets 10,200

An early wobble in the DAX yesterday did not lead to major downside, with 10,070 providing strong support. Now we look to see if the index can close above 10,200 and resume the steady rising trend that has prevailed in October so far. However, a continued failure to move above this level would suggest that bullish momentum is stalling, with the index then moving downward to test support around 9941.

Dow struggling to move beyond 17,200

For two days now the Dow Jones has been unable to push meaningfully beyond 17,200, butting up against the 100-day SMA at 17,230. As with the DAX, a continued failure to move beyond this key level will raise the prospect of a swift move lower, down towards 17,010 and then potentially on to the 50-day SMA at 16,651. If the index can sustain a move through 17,200 then the possibility of a test of the 200-day SMA at 17,577 is still on the cards. 

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