Levels to watch: FTSE 100, DAX and Dow

European and US markets have been on the rise, yet with the uptrend slowing, there is a strong chance we will soon see a strong decline for the likes of the FTSE 100, DAX and Dow.

Indices board Source: Bloomberg

FTSE 100 rally unlikely to last

The FTSE 100 has been on the rise overnight, following on from a bearish break from the 76.4% retracement.

The subsequent drop below 6861 provided us with a bearish outlook, which is expected to come back into play today. With that in mind, a bearish outlook is in play unless we break through the 7000 peak. However, with the Brexit vote taking place this evening, be aware of likely volatility to come.

FTSE 100 chart

FTSE 100 chart

DAX turning lower from notable resistance level

The DAX has managed to rebound back into the 10,987 resistance level, with the price now respecting that level to start declining once more.

The fact that we are continuing to create such marginal new highs highlights the possibility that this market is set to decline, with the inability to create a higher low on Monday highlighting that same sentiment. With that in mind, it looks highly likely that we will see the index break lower before long. Confirmation of that bearish sentiment comes with a break and close below 10,786.

DAX chart

DAX chart

Dow rallies into trendline resistance

The Dow Jones has managed to break through the 200-day simple moving average (SMA) on the four-hour chart, with the price completing a trendline by providing a third touch.

We are seeing the index turn lower in response, with another trendline worth watching to the downside as support. With that in mind, it is worthwhile watching out for a break below 23,726 as a signal of impending breakdown for the index.

Dow Jones chart

Dow Jones chart


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