Levels to watch: FTSE 100, DAX and Dow

Indices have been gaining ground after a strong Chinese manufacturing PMI survey, bringing the Dow and FTSE 100 into notable resistance levels.

FTSE 100 closes weekend gap higher

The FTSE 100 has moved back towards Friday’s close, following on from a sharp move higher that came about thanks to a strong batch of Chinese purchasing managers index (PMI) surveys.

This fall may not be too worrying for the bullish case, with the market having gained a significant amount of ground since hitting the 76.4% Fibonacci retracement at 7146. We have since rose into the 76.4% retracement at 7317, which represents the final resistance level until 7370. A break below 7233 would bring about the potential for greater downside, yet until there is a chance that we are seeing a short-term retracement here.

FTSE 100 chart

FTSE 100 chart

DAX rebounds into deep retracement zone

The DAX rebound has taken the price into the zone between the 61.8% and 76.4% retracement levels.

The prior break below 11,401 signaled a potential retracement in play here, pointing towards a possible bearish turn rather than breaking through the 11,824 peak. To test that theory, we need to watch how this market reacts to the Fibonacci resistance levels. Thus, a break through the 11,693 level would point towards a continuation of the recent bullish sentiment

DAX chart

DAX chart

Dow rallies back into major resistance zone

The Dow Jones has enjoyed a notable jump over the weekend, with the index returning to the mid-March peak of 26,114.

A break through this level points towards a push upwards with the 26,241-26,277 resistance zone. Thus, watch for whether we can break through this resistance level or not today to influence the outlook.

Dow Jones chart

Dow Jones chart


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