Levels to watch: FTSE, DAX and Dow

The FTSE appears to be in buoyant mood this morning, as it continues its ascent despite impending resistance. Meanwhile, consolidation for the DAX and Dow point towards near term breaks to direct bias.

IG Analyst

Publication date : 2017-05-11T09:13:58+0100

Source: Bloomberg

FTSE continues to trend upwards

The FTSE is pushing higher this morning, following a shallow 38.2% retracement overnight. This comes off the back of a break through trendline resistance and the January high of 7359. The next hurdle is going to be an absolutely crucial one, with a break through 7409 required to negate the downtrend we have seen over the past two months. Should that occur, it would point towards a wider recovery and continuation of the wider uptrend.

As such, while there is a clear uptrend in play, watch out for the ability to break 7409, as this will give us clues as to whether we will head to new highs in the near future or not. On the flipside, an hourly close below 7321 would point towards a bearish picture developing.

FTSE chart

DAX failing to gain momentum, following trendline break

The DAX is treading water this week, with the volatility seen around the French election starting to lead some to wonder whether the rally is overcooked somewhat.

With the price having broken through trendline support, there is a potential that we are going to see some downside from here. That being said, until the price action confirms this, we remain within a consolidation phase. As such, the short term bias will be dictated by whether we post an hourly close below 12,704 (bearish) or above 12,786 (bullish). In the long term, the bias is bullish irrespective of the impending break.

DAX chart

Dow consolidating at range bottom

The Dow Jones returned to the 20,888 level overnight, as the index looks set to respect its recent range once more. The key here is whether we can break below 20,846. As long as we remain above that level, another move higher looks likely. With that in mind, a move back towards the 21,050 region is preferred.

Conversely, an hourly close below 20,846 would point towards a potential move into Fibonacci support between 20,724 and 20,641.

Levels to watch: FTSE, DAX and Dow

FTSE continues to trend upwards

FTSE chart

DAX failing to gain momentum, following trendline break

DAX chart

Dow consolidating at range bottom

Dow Jones chart

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