FTSE 100, DAX and Dow upside could be limited until we break resistance
FTSE 100, DAX and Dow gain ground, yet further short-term downside could come into play if we don’t break key resistance levels.
FTSE 100 turning higher after brief pullback
The FTSE 100 is on the rise this morning, following a sharp move lower in early trade yesterday. With the stochastic turning higher, there is a good chance we will see some upward momentum in early trade.
However, the relatively shallow nature of this recent pullback means we could see further downside come into play before long. A break through the 6324 level would signal a wider bullish picture coming into play. Until then, there is a good chance of further short-term downside following the recent break below 6219.
DAX starts to strengthen after recent pullback
The DAX has started to turn higher this morning, following a period of weakness from Tuesday's high. There is a good chance we are seeing a retracement of the recent rally from 12,807, yet while the index is turning higher this morning, the medium-sized pullback we have seen does point towards the possibility of another move lower before the bulls come back into play.
This morning has seen the price move back towards the notable 13,199 level, which would bring a more bullish outlook if broken. However, with the index starting to weaken from that point, further short-term downside could come into play from here as we head towards the 61.8% and 76.4% Fibonacci retracement levels. Nevertheless, a wider bullish outlook remains in play unless we see the price break below 12,807.
Dow Jones closes in on key resistance level
The Dow Jones has managed to rise into trendline resistance this morning, with the price pushing towards the key 27,180 resistance level from last Wednesday. Given the current respect of this ascending trendline, there is a chance we could see short-term downside.
However, should that occur, we would likely see another higher low come into play. As such, bullish positions look more attractive on a break through 27,180, or at a deep retracement level of the rally from 26,639. Conversely, a break below that 26,639 level would be required to bring about a more long-lasting bearish picture.
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