FTSE 100, DAX and Dow show signs of potential bearish reversal
FTSE 100, DAX and Dow start to turn lower, following a period of gains.
FTSE 100 turning lower despite fleeting upside break
The FTSE 100 rallied through 7219 resistance yesterday, showing potential signs of an impending bullish break. Coming off the back of this recent period of downside, it does look likely that we will see another leg higher to continue the short-term trend.
Nevertheless, that initial move didn’t pan out, with the price now turning back into the recent descending channel once more. With Wednesday’s low of 7148 only marginally above the 76.4% Fibonacci support level at 7145, there is a crucial zone of support below the current price. The ability or inability to break below that zone should be key in determining sentiment today.
DAX falls into support within massive rally
The DAX has been gaining ground at an impressive rate over the course of the week, with the index hitting a 14-month high yesterday.
We are starting to see some signs of weakness, with the price falling into the 12,601 swing low. A decline below that level could bring a more bearish short-term picture as traders seek to lock in gains ahead of a hugely volatile weekend. With that in mind, watch out for a potential break below 12,601 to signal a potential bearish phase coming into play. Until that happens, the short-term uptrend remains intact.
Dow starting to show signs of potential weakness
The Dow Jones is also starting to slow down following a week of upside for the index.
The rally into trendline resistance has been coupled with a lack of new highs upon attempting to rebound yesterday. Given that flat-lining high, it makes sense to look for a break below 26,914 to provide a bearish signal for the short term. Until then, watch for a break through trendline and horizontal resistance (27,121) to bring about a bullish continuation signal.
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