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Levels to watch: FTSE 100, DAX and Dow

Tuesday was mixed for Europe and the US, but it seems Wednesday offers more hope for gains following last week’s dip.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-08-16T08:41:59+0100

Wall Street

Source: Bloomberg

FTSE 100 testing 7400

The broad move higher in risk assets continues, with the FTSE 100 now testing the water around 7400. A push back above the 50-day simple moving average (SMA) at 7424 would also see it take out the post-June descending trendline. Above this the levels to watch are 7448, 7553 and then 7600.

Given the strength of support at 7300, bears will need to work hard to push this market lower, with a daily close below the 200-day SMA at 7282 needed to radically alter the outlook.

FTSE chart

FTSE chart

FTSE chart

DAX turning bullish again after yesterday’s struggle

An indecisive session yesterday saw the DAX struggle to gain ground, but it seems the bulls are back today.

A close above 12,300 would provide the catalyst for a push towards the 50-day SMA at 12,454 and mark the resurgence of bullish momentum. A failure to break 12,300 would signal that the downtrend off the June high remains in place.

DAX chart

DAX chart

DAX chart

Dow targeting the all-time high

Also on the Dow Jones, Tuesday’s session saw muted action, although futures are pointing to a higher open. The target, once the Tuesday high of 22,062 is taken out, remains the all-time high of 8 August, at 22,179.

At present, the market appears happy to jump on the slightest pullback, it is interesting to note that even a dip to 21,609 and the 50-day SMA would not even be a 2% move. The similarities to May’s price action, when a swift drop was followed by sustained gains over the next month, are hard to ignore.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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