Levels to watch: FTSE, DAX and Dow

After a somewhat uninspiring week for global equities, we await a directional breakout for the FTSE, DAX and Dow.

Data board
Source: Bloomberg

The FTSE 100 has started showing some signs of weakness around the 6750 mark, with an inside trendline also providing a key form of dynamic resistance. Given the largely sideways nature of this market over the past week, there is reason to believe we could see another period of weakness today, with the stochastic turning lower from overbought territory.

Ultimately, any pullback would likely be short-term in nature and as such, a bullish view remains unless we see an hourly close below 6663. That being said, it is worth watching out for a possible short-term pullback before pushing higher once more. Should that occur, the 76.4% support level would be of particular interest at 6684.

The DAX continues to consolidate, after a somewhat uninspiring week just gone. There is a good chance that we are simply seeing a short-term pause before another leg higher.

However, with price largely rotating around the 76.4% retracement (10,170), there is a chance we could see a bearish reversal come into play. For this to occur, we would need to see an hourly close below 10069 or more importantly 9928.

Friday saw much of last week’s gains for the Dow wiped out and this brings about the chance that we will see this market turn lower. The key to this would be an hourly close below 18,470 or 18,424 for greater confidence.

Also, be aware that the previous all-time high is found at 18,365, which would provide a potential bounce if reached. Until we see such a break lower, another leg higher remains a distinct possibility.

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