Technical analysis: key levels for FTSE, DAX and Dow

A positive open for indices was given an added boost on news of a ceasefire in Ukraine.

Vladimir Putin
Source: Bloomberg

The ending of a conflict is good news for humanity generally, leaving aside its impact on financial markets. It appears the Russian and Ukrainian presidents have managed to hammer out a ‘permanent’ deal to stop the fighting in the region. The specifics have yet to emerge, but for now investors are content to see one of the most persistent worries of the year apparently disappear.

Equity indices in the UK and Europe have rallied this morning, with the FTSE coming within a whisker of reaching 7000. Pre-European Central Bank caution has been flung to the wind, although the potentially pivotal meeting tomorrow cannot be ignored.

Ceasefire news boosts FTSE 

The ceasefire news saw the FTSE, which had opened above 6830 once again, surge, breaking the 6875 level highlighted earlier this week as significant resistance.

Now the index must manage to close above this level to maintain the momentum, and to be in with a chance of reaching the all-time high around 6930.

Support should be found around 6830 if today’s move weakens, and with the daily relative strength index now overbought again the index may stall ahead of the ECB tomorrow.

DAX clears 9600

The German index has cleared the 9600 level, although it is presently showing some reluctance to clear the 100-day moving average. Nonetheless, a close above 9600 gives it scope to head towards 9800, with potential intermediate resistance around 9700.

A loss of 9600 would suggest another retest of the rising 2013 trendline, currently around 9480.

Dow gains ground

US futures have gained ground this morning too, but the Dow Jones is so far seeing little desire to move above 17,130, while 17,154 remains the key level to watch.

A close above 17,154 puts the index back in all-time high territory, but with so much US data due in the coming days traders may opt to sit on their hands. A drop back below 17,060 would raise the prospect of a possible dive back towards the 50-DMA around 16,890, but would leave the uptrend intact. Only a close below this level would really provide reason for concern in the short-term.

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.