Levels to watch: FTSE 100, DAX and Dow

Indices look at risk of another bearish turn from here, with recent upside expected to falter before long.

Traders Source: Bloomberg

FTSE 100 rallies from Fibonacci support

The FTSE 100 has been gaining ground from the 76.4% retracement area, coming off the back of a period of steep losses last Friday. The gradual nature of these gains points towards a potential pullback before long, yet this could provide us with a higher low to then start feeling more bullish.

A break back below the 7146 low would signal a more bearish picture coming into play. In particular, a break below 7076 would bring about a wider bearish picture.

FTSE 100 chart

FTSE 100 chart

DAX gains look likely to falter

The DAX has been gaining ground off the back of those steep losses last week, with the index moving back into overbought territory on the stochastic oscillator. The break below 11,401 support last week, we are likely to see the DAX turn lower again before long.

With the price starting to weaken from the 11,473 resistance level, there is a chance of short-term losses. However, we would need to see the index break below 11,300 to provide a more secure bearish outlook. Until then, there is a chance that this rebound will be longer lasting before the bears come back into play.

DAX chart

DAX chart

Dow rebound expected to fall short

The Dow Jones has been gaining ground throughout the beginning of the week, with the index moving into the 61.8% and 200-simple moving average (SMA) on the four-hour chart.

The creation of lower highs over the past week points towards a likely bearish turn from here. A break above 26,011 would negate that bearish view, with downside expected unless that upward break occurs.

Dow Jones chart

Dow Jones chart


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