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FTSE 100, DAX and Dow gains could be short-lived

​​FTSE 100, DAX and Dow regain ground, yet it could be a precursor to further downside.

FTSE 100 rises back into Fibonacci resistance

The FTSE 100 has managed to push higher once again this morning, with the index rising through trendline resistance after overnight losses. The triangle formation seen over the course of April could break in a bullish manner if the index rises through 5849.

However, with the 76.4% Fibonacci level up ahead, it is worthwhile watching this area of resistance as a potential turning point for the FTSE. With the stochastic moving back into overbought territory, there is a chance we could see price start to consolidate or roll over around these levels. This bearish outlook is negated with a break through 5849.

DAX rises within consolidation/topping phase

The DAX failed to break below the 10,152 support level on Tuesday, with the index maintaining the price action within its consolidation or topping zone. The breakout from this range should ultimately guide us in the direction of the next move.

However, with US markets providing a more bearish outlook, a follow up on those moves would likely drag European markets with it. In that scenario, the current rally looks like it could be a short-term retracement before we turn lower once more. The price is currently respecting the 50% retracement level, yet we could move further into a 61.8% or 76.4% pullback. In any case, a bearish outlook is in play unless we see a rally through 10,773.

Dow Jones rally could be doomed for failure

The Dow Jones is regaining ground following a strong downward move in the early part of the week. That breakdown took us below the 23,089 support level to break the previous uptrend.

With that in mind, there is a good chance we are currently retracing before the index rolls over once again. Thus, keep an eye out for Fibonacci resistance to potentially come into play from here. As such, while we could see further upside for the short term, that move is likely to roll over rather than break through the 24,447 peak. Such an upside breakout would obviously negate this current bearish outlook.

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