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Levels to watch: FTSE 100, DAX and Dow

Overnight gains across the indices are now slowing, with the potential for short-term downside.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

FTSE 100 hits key resistance after breakout

The FTSE 100 has managed to continue its ascent overnight, with the price rallying upwards after yet another intraday higher low. This would ordinarily have a stronger follow through.

However, given the existence of a crucial resistance level at 7256, we have seen the rally peter out at that point, with the price subsequently turning lower. We would need to see an hourly close above 7256 to point towards a bullish breakout on the medium term. Conversely, an hourly close below 7167 would point towards a bearish shift from here.

DAX spikes higher into trendline resistance

The DAX managed to push higher yesterday, as the price moved into trendline resistance once more. We are seeing some consolidation around that area, which points towards the potential for a pullback in the short term. Any such downturn would need to break below 12,201 to provide a more bearish outlook.

While there is a good chance we will see another leg higher before long, a greater confidence that the worst is over would only come with a break up through 12,477 resistance.

Dow regaining ground amid bottoming out pattern

The Dow Jones has been regaining ground of late, with higher highs and higher lows providing the basis for a more bullish phase going forward.

With the index having retraced towards the 76.4% Fibonacci level, there is a chance we will see further upside from here, with a break above 24,637 pointing towards greater confidence of a bottom. A break below 23,742 would lessen the confidence of further upside. 

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.