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Levels to watch: FTSE, DAX and Dow

The FTSE and Dow find themselves at key crossroads, with both finding support on major historical levels. Will they bounce or continue their recent descent?

anonymous

Publication date : 2017-01-24T09:27:58+0000

Data board

Source: Bloomberg

Will FTSE support hold?

The FTSE managed to bounce from the crucial 7130 support level yesterday, with price rallying into the 7176 level time and time again. We would need to see price break from this current decision zone for a signal of the next move. That means an hourly close below 7130 would provide a bearing continuation signal.

Conversely, an hourly close above 7176 would point towards a rally into the 7200 region. We would subsequently require a break through 7222 to signal an end to the recent downtrend.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX turning lower once more

The DAX is on the turn once more this morning, following a sharp rally from the 11,521-11,531 support zone yesterday. The range evident over the past three weeks remains relevant, yet the continued creation of lower highs is a worry for bullish positions.

As such, greater bullish confidence comes with a break through 11,607. Conversely, a break back below 11,500 would look like we could move back into the 76.4% retracement 11,471.

DAX price chart

DAX price chart

DAX price chart

Dow consolidates following potential reversal signs

The Dow Jones is continuing to consolidate following the rally through both trendline and horizontal resistance on Friday. Given this challenge to the recent downtrend comes following a failed follow through on a double top formation, there is a good chance we could start to see a bullish reversal come to fruition.

For a bullish outlook to come into play, we would need to see an hourly close above 19,848. Conversely, an hourly close below 19,720 would point towards another shot at following through on the double top pattern.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

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