Levels to watch: FTSE, DAX and Dow

Overnight weakness fails to dampen bullish spirit, as the US markets lead the way once more.

Data boards
Source: Bloomberg

FTSE bounces from trendline support

The FTSE 100 rallied towards the 76.4% retracement yesterday, following a bounce from trendline support.

With price having broken through 7000 on Monday, the index is showing signs of resurgence. However, we would need to see an hourly close above 7020 to provide confidence of this bullish outlook. 

DAX regains ground following pullback

The DAX fell all the way to 11,146 on Monday, as it threatened to negate the recent uptrend. However, price has come back from the brink and is consolidating after a strong move higher yesterday.

With that in mind, a bullish outlook remains, with the ability to maintain price above the 11,242 support level providing greater confidence of another move higher. The next major resistance level in place from a wider context is 11,434 and while we have seen some signs of hesitation this week, the signs still look good for a move back to 11,325 and onwards.

Dow rally set to continue

The recent rise of the Dow Jones is nothing short of amazing, with new all-time highs being posted on a regular basis. The weakness we have seen overnight looks highly similar to Monday’s pullback, which ultimately ended in the trend resuming once more.

As long as we do not break below 19,747, then this bullish view continues to reign, with an hourly close above 19,956 providing a signal of the next leg higher. Of course, we have a certain FOMC meeting to contend with today, yet given the resilience shown by stocks in the face of Brexit, Donald Trump and Renzi, another rally wouldn’t be a total surprise. 

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