Levels to watch: FTSE, DAX and CAC

A US holiday provides the opportunity for traders to push this market higher, as we are seeing in the early part of the session.

US trader watching data boards
Source: Bloomberg

Will Martin Luther King Day drive FTSE 100 higher?
With US markets closed for Martin Luther King Day, some opportunistic buyers may take the opportunity to push this index off the lows from last week. That is what is happening now, with the 5840 area, key support from last week, being tested in early trading.

A continuation of this move takes us towards 5867 and then on towards the 200-hour simple moving average (SMA) at 5937. Rallies on the hourly chart, pushing indicators such as the relative strength index (RSI) back to overbought levels, have been the cue for fresh selling, so we may see this develop.

A move back down towards 5750 suggests a test of 5688 and then 5584. 

DAX still in the hands of the sellers
A rally here is taking the price away from 9400, which proved to be a significant zone of support in August and September 2015, and was so last Friday. A move back towards 9813 is possible, but as with the FTSE, such rallies tend to be sold at present.

With the euro weak today, the DAX will find the going easier, but unless it holds above 9900 the sellers will still have the upper hand. A break below Friday’s low of 9400 would head towards 9289 and then 9000 itself.

CAC40 looks towards potential resistance
Traders have pushed this market back above 4200, heading towards 4329 and potential resistance. However, if the price holds below 4400 then a turn lower is likely, at which point we look towards the lows of last week around 4150, and from there on towards 4097. 

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