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Levels to watch: FTSE 100, DAX and Dow

An overnight rocket launch from North Korea sends stocks sharply lower, taking out key support levels on the way.

Market data
Source: Bloomberg

FTSE 100 falls back towards key support level

The FTSE 100 is falling back once more, with the index continuing its descent instigated since Friday. The short-term picture points towards further downside, with a break above 7376 required to negate the short-term downtrend.

From the wider perspective, we need to see a break below 7294 or above 7446 to provide a bullish or bearish outlook. 

DAX breaks lower from symmetrical triangle

The DAX has dropped through trendline support and the first swing low of a symmetrical triangle pattern, pointing towards further downside to come. While there had been initial signs of this market turning higher, the actions of North Korea have sent the price crashing lower once more.

The 11,921 level is going to be absolutely crucial here, with a break and close below that level pointing towards a bearish medium-term outlook.

Dow drops out of consolidation stage

The Dow Jones dropped out of its recent consolidation thanks to North Korean actions last night, with the index threatening to move lower once more this morning. This certainly makes things look more bearish for the time being, with a break below last night’s low of 21,646 pointing towards a potential move back into 21,599 support.

Alternately, a break up through 21,729 would point towards a potential return to the key 21,764 resistance level.

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