FTSE 100, DAX and Dow likely to continue their recent gains
FTSE 100, DAX and Dow look likely to continue their recent gains, despite short-term FTSE weakness.
FTSE 100 turns lower after recent drive higher
The FTSE 100 is weakening in early trade today, with the post-Bank of England (BoE) GBP strength driving the index lower. Despite the fact that we managed to run through the 76.4% Fibonacci level with ease, the wider trend of lower highs remains in play for the time being.
That puts the index at risk here, following the stochastic breakdown out of overbought territory. As such, we will ultimately require a break through the 6165 swing high to bring about a more confident bullish continuation signal. To the downside, a break through the 5984 level would add greater downward pressure. Until then, there is a chance we are looking at a short-term pullback, which would mean that the index potentially finds support around this current deep Fibonacci retracement zone.
DAX consolidation likely to resolve with move higher
The DAX has been in consolidation mode following a period of upside at the start of the week. The sideways nature of this consolidation points towards a likely upside break given the sharp rise into this phase.
However, it could make sense to await a break through either 12,770 (bullish) or 12,526 (bearish) to bring about a fresh breakout signal.
Dow breaks through major resistance after a week of gains
The Dow Jones has been a big outperformer this week, with the index heading higher with little by way of retracements. That reliable trend is great if you are long, yet the lack of any notable swing lows can make new entries difficult.
As such, the use of a standard deviation channel should highlight areas of potential value if the price comes back into the bottom end of this move. Ultimately, with the price having broken through the 27,179 level, further upside looks likely from a wider perspective.
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