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Levels to watch: FTSE 100, DAX and Dow

Indices are on the decline once again following recent gains. Could we be set for another leg lower or will key resistance hold up?

Joshua Mahony JMahony_IG
Senior Market Analyst, London

Publication date : 2018-11-22T09:28:11+0000

Trader

Source: Bloomberg

FTSE 100 rally pauses below key resistance level

The FTSE 100 is turning lower this morning, following on from a rally through trendline resistance.

While the recent break through the 7010 swing high and trendline resistance are bullish signals, a move above the 7070 mark would provide a much more reliable bullish outlook. For now, we look likely to provide further downside, with the failure to break 7070 providing us with a chance that we could still see another low created. In any case, the near-term outlook remains bearish for now.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX turning lower from trendline resistance

The DAX is weakening off the back of a rally into trendline resistance. The recent downtrend for the index seemed to have hit the buffers when we started seeing the index rally off a long-term historical trendline.

However, with the price turning lower once more, there is a chance we will see another challenge of that trendline support. As such, with while we are likely to see further short-term weakness, watch out for whether we manage to break that ascending trendline or not as a precursor to what comes next.

DAX chart

DAX chart

DAX chart

Dow heading lower, yet challenges remain

The Dow Jones is similarly turning lower, with a brief respite seen yesterday giving way to another period of weakness. This period of weakness will be crucial, for if we do not begin to reverse higher soon, we could see a wider bearish outlook come into play.

As such, with while a break below 24,368 would bring about expectations of further downside, the 24,120 and 23,992 levels provide stiff tests to this bearish trend.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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