Levels to watch: FTSE 100, DAX and S&P 500
Continued escalation in the US-China trade war has driven indices lower in early trading, continuing the weakness that has dominated so far in May.
FTSE 100 tests last week’s low
The losses continue for the FTSE 100, as the price heads back to the 7200 area that marked the low last week. This level was furiously defended, but equally well-defended, this time by the sellers, was the 7260-7280 range.
Rallies towards this area last week ran out of steam. A push through this zone targets 7360 and then 7400 to break the series of lower highs. A close below 7200 and below the 200-day simple moving average (SMA) of 7184 would bring 7140 and 7070 into view as possible support.
DAX dives in early trading
The DAX rally into the close on Friday has been followed up by a gap lower and steep loss in early trading today. Possible areas of support would be 11,830 and then 11,280.
A break back above 12,200, key resistance last week, would help break the sequence of lower highs and target 12,350 and 12,450.
S&P 500 still pushing lower
Sellers have stepped in to push the S&P 500 back from its late Friday high at 2890. The 2830 area from Friday’s lows now comes into view. Below this 2790 and 2720 are areas of potential support.
A rebound needs to begin with a push through 2890, the highs of last week.
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