Levels to watch: FTSE 100, DAX and Dow

The indices are gradually gaining ground, yet with wider downtrends still intact, there are still major hurdles that need to be overcome to signal a bullish medium-term picture.

FTSE 100 continues to gain ground

The FTSE 100 has been grinding higher over recent trading days and today is no different, with the index hitting a new two-month high this week.

The rally past Fibonacci resistance at 7000 points towards the possibility that this move could see us break out of the downtrend with a move above 7196. However, for now the intraday picture simply tells us that we could see further upside as long as we do not break below the 7000 swing low.

FTSE 100 chart

FTSE 100 chart

DAX gaining ground after recent breakdown

The DAX has been threatening to break sharply lower, following the fall out of a rising wedge pattern. A drop below 11,004 would have provided that notable bearish signal.

However, we are seeing the index move away from that support threshold and towards the resistance zone around 11,308. A break above there would signal a bullish continuation in play.

DAX chart

DAX chart

Dow continues gradual ascent

The Dow Jones pushed onwards yesterday, with the gradual ascent of recent over the past week continuing to play out. The rally through the 76.4% retracement and 25,000 handle points towards a heightened chance of us breaking out of this wider downtrend by rallying through 26,072.

However, as is evident with the trendlines in play, the index appears to be trading within a rising wedge formation. Watch for a break through trendline resistance to add greater confidence that this uptrend has further legs. Alternately, a break below trendline support and the 24,835 level would start building a more bearish picture.

Dow Jones chart

Dow Jones chart


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