Levels to watch: FTSE, DAX and S&P 500

The FTSE is poised to break out of its recent downtrend, while US markets remain under pressure. 

DAX trader
Source: Bloomberg

FTSE 100 has begun approaching 7409

An early push higher this morning continues the sequence of higher highs and higher lows that has prevailed since 20 April. As noted yesterday, 7409 is the point at which the downtrend off the all-time highs is definitively negated, and the FTSE 100 has already begun knocking on that door this morning. A close above it leaves the price clear to push on to 7448.

A drop below 7321 would start to indicate the possibility of further weakness ahead, with a drop through the rising trendline off the April lows pointing the way to a firm bearish development.

DAX a break above 12,785 needed here to challenge the all-time high at 12,850

Positive momentum has ebbed away from the DAX throughout the week, although 12,659 continues to hold as short-term support. A drop through here raises the prospect that the price will return to 12,408, the previous all-time high.

Meanwhile, 12,785 has held back upward progress over the past few days, so a break above here is needed before the price can move on to challenge the all-time high at 12,850.

S&P 500 resistance has been 2398-2403 this week

US futures are indicating more weakness to come, after it failed to push on above 2400 earlier this week. The zone around 2380 has acted as support over the past three weeks for the S&P 500, so we will need to see a daily close below 2378, and ideally below the 50-day simple moving average (SMA) at 2368 to indicate that more downside is on its way.

Resistance this week has been 2398-2403, so buyers will need a daily close above here to indicate a definite breakout is in progress. 

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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.

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