Technical analysis: key levels for FTSE, DAX and Dow

Markets are awaiting US data due today, which accounts for the lack of a clear direction, but so far this morning there seems little to drive any move to the upside.

A man walking by a chart
Source: Bloomberg

Choppy early session for FTSE

It’s been a choppy session so far in London, with small gains and losses ahead of the US data tide later today, but the failure to hold 6830 yesterday indicates the FTSE needs a big catalyst to drive it higher.

Only a close back above 6830 would really signal that a run to 6880 is back on, even if the relative strength index is continuing to rise as has been the case over the past few days.

On the intraday chart the 200-hour moving average is continuing to rise, while the intraday RSI has risen back above the 50 mark. On the downside the 6770-6780 range should provide support in case of any lurch lower.

DAX targets 9770

So long as 9600 holds, the bias remains cautiously to the upside in the DAX, although the short-term trend remains downwards as exemplified by a declining 20-day moving average.

The first target on the upside is 9770, with the 50-DMA being the next area to watch for. In the meantime any drop should be contained by the 200-DMA, currently at 9505. Tests towards this line, such as that on Monday and previously in March and April, have brought out the buyers.

Ideally the bearish trend in the moving average convergence/divergence needs to be reversed along with any rally in the price itself.

Dow buyers could return around 50-DMA

A drift towards the 50-DMA for the Dow Jones is providing the most sustained downward move in weeks. The level 16,910 has provided support over the past two weeks, while the 50-DMA itself could see buyers return.

On the downside the 16,800 level should act as support; while looking higher we need to see a move back above the 20-DMA to call the end of this period of weakness. A declining RSI indicates the buying pressure needed to carry us higher is not yet in evidence.

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