CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Levels to watch: FTSE, DAX and Dow

A weakening pound pushes the FTSE higher, yet with the FTSE, DAX and Dow all at key resistance, there is a major challenge up ahead.

New York Stock Exchange trader
Source: Bloomberg

FTSE rallies back into range top

The FTSE has been incredibly predictable this week, with the July range of 7300-7386 holding up in a very consistent manner. With dovish comments from Bank of England’s (BoE) Ben Broadbent, we are seeing weak pound drive the FTSE back into the crucial 7381-7392 resistance zone.

Should we post an hourly close above 7392, then this could point towards a breakout in play. However, until that happens there is a good chance we will see the sellers come in once more from here.

DAX attempting to break through key resistance

The DAX is back at the May/June double top and July double bottom neckline. Clearly given the existence of both those necklines, a break higher from here would be highly notable.

Such a break would point towards a potential double bottom projected target of 12,681. The interesting thing about that projection is that it falls short of the 12,735 swing high. With that in mind, a break higher from here would look like a retracement of the sell-off from 12735 and thus we could still see further downside. However, for now, we are watching intraday charts at this crucial resistance levels for it could bring us a spike higher or potential pullback.

Dow heading back into trendline resistance

The Dow Jones is consolidating after a highly volatile US session yesterday thanks to Donald Trump Jnr. For now, we have a clearly defined trendline that continues to hold. A break and hourly close above 21,441 would point towards a bullish resurgence.

However, until then we have a good chance of weakness at trendline resistance and thus shorts around trendline resistance, with stops above 21,441 look attractive for a short-term move back into the 21,400 region.

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