Levels to watch: FTSE 100, DAX and Dow

Stocks have started to show signs of strength despite the weakness seen through the week thus far. Will we see a break through key resistance or simply another leg lower?

FTSE 100 consolidating after recent declines

Early FTSE 100 weakness turned positive yesterday, with the index rising into the prior intraday swing high of 7278.

The ability to break through that level will be key to providing a more bullish outlook. However, the fact that we failed to create a lower-high does raise doubts over the downtrend that is currently in place. As such, watch out for a break above 7279 (bullish) or below 7190 (bearish) to provide a directional bias.

FTSE 100 chart

FTSE 100 chart

DAX rebounds within recent bearish trend

The DAX has similarly been gaining ground over the short term, with the price having moved into the 76.4% retracement level at 12,155.

This looks like another retracement given the downtrend that has been in play over the course of the week, with a rise above 12,217 required to bring about a more bullish picture.

DAX chart

DAX chart

Dow rebounds from 76.4% retracement support

The Dow Jones has been moving higher since hitting the 76.4% Fibonacci retracement support level. The wider trend remains bullish unless we see a break below 25,216.

However, the short-term downtrend could come back into play given the respect of Fibonacci resistance at 25,975. The bullish picture would emerge once more if we see a rise through the 26,119 swing high.

Dow Jones chart

Dow Jones chart


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