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Levels to watch: FTSE, DAX and Dow

Modest losses continue, and while signs of buying are emerging, a full afternoon of Federal Reserve speakers could keep the bulls in check.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-03-03T09:16:00+0000

Trader in the New York Stock Exchange

Source: Bloomberg

Fed speakers may make FTSE 100 nervous

We have seen the FTSE move back from all-time highs, and dip below the 50-hour simple moving average (SMA) – 7372. However, buyers appear to be entering around 7350; with a busy day of Federal Reserve speakers on tap we could see further nervousness back down to 7320. A move back into the 7280/7320 zone would mark a consolidation, with a potential break lower. The target to break remains 7400.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX uptrend set to continue

The pullback from above 12,000 has seen the DAX price return to the rising trendline off the 8 February low. If buyers can mount a defence here then a rally back to 12,100 could be in order.

A loss of 12,000 could suggest a move back to 11,858, while even a drop to the 50-day SMA at 11,685 would still leave the index within the longer-term uptrend.

DAX price chart

DAX price chart

DAX price chart

Dow rally not to be underestimated

It is important to note the Dow Jones could go all the way back towards 20,840, another 120 points lower, and still be within the immediate uptrend from early February. The index has dropped back from all-time highs but is now heavily oversold.

With a busy afternoon of Fed speakers, US assets will be primed for volatility, but it would be wise not to underestimate this rally. A drop below 20,800 would be needed to really suggest the bounce has come to an end.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

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