DAX, FTSE 100 Talking Points:
- DAX 40 remains confined to key technical levels
- FTSE 100 rally loses steam at psychological resistance
- Equities remain resilient despite the geopolitical backdrop
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DAX, FTSE Pullback From Resistance
EU and UK stocks have experienced a strong recovery from the March lows, allowing prices to return to pre-war levels. After the return of risk-sentiment allowed equities to rise throughout last week, a slight correction in prices has hindered the ability for DAX and FTSE to climb higher, muting the recent rally.
FTSE 100 Technical Analysis
Following the invasion of Ukraine (on 24th Feb), the FTSE Index suffered an approximate 11.67% decline before bulls regained temporary control over price action, allowing the Index to recover its losses.
After five consecutive days of gains, FTSE prices have temporarily stalled at 7,495, the 78.6% Fibonacci level of the February – March move. With prices currently trading above both the 20 and 50-day MA (moving average), fundamental factors are likely to continue to contribute to volatility, providing an additional catalyst for price action.
As bulls strive to reclaim the key psychological level of 7,500, the MACD (moving average convergence/divergence) continues to rise towards the zero line and away from oversold territory.
FTSE 100 Daily Chart
Chart prepared by Tammy Da Costa using TradingView
| Change in | Longs | Shorts | OI |
| Daily | -32% | 1% | -6% |
| Weekly | -43% | 57% | 22% |
If bullish momentum gains traction, a break above 7,500 may allow buyers to retest the February high at 7,687 with the next level of resistance residing at the 7,800 handle.
On the contrary, a break below the 7,343 Fibonacci level may allow bears to drive prices below the 50-day MA at 7,237, leaving the door open for the next zone of support at 7,131.
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DAX (Germany 40) Technical Analysis:
Similarly, the German DAX continues to trade above the 20-day MA (moving average), providing an additional layer of support at 13,926. While the MACD rises towards the zero-line, bulls have a few hurdles to clear before reclaiming the February high (16,298).
For this to be probable, price action would need to rise above the key psychological level of 14,500 which paves the way for 14,803 (the 50-day MA). A break of this level could then see the 15,000 mark come into play with trendline resistance providing an additional level of resistance at around 15,220.
DAX (Germany 40) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
Meanwhile, if bears are able to regain control over the prominent trend, a break below 13,926 (the 20-day MA) could result in a retest of 13,697 (the 38% Fibonacci level of the above-mentioned move) with the next level of support resting at 13,215.
| Change in | Longs | Shorts | OI |
| Daily | 16% | -8% | -2% |
| Weekly | -20% | 8% | -2% |
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
