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Levels to watch: FTSE 100, DAX and Dow

Hopes of a US-China trade breakthrough have been rebuffed, causing a short, sharp spike for global indices. Is this going to mark the beginning of a period of weakness for indices?

FTSE 100 briefly breaks crucial swing high

The FTSE 100 joined many of the world markets in rallying sharply this morning, after rumours of a breakthrough between the US and China hit Twitter. This has since been rebuffed, causing the FTSE to turn lower.

However, that rally through 7059 highlights a potential bullish breakout in the not-so-distant future. For now, we are heading back towards the 7002 region of support. A break below that level would bring about a bearish near-term view, with a retracement of the rally from 6911 coming into play.

DAX weakening from trendline resistance

The DAX also saw a fleeting rally this morning, with the index pushing into the 200-day simple moving average (SMA) on the four-hour chart.

However, with trendline resistance in play, there is a good chance we will see a downside come into play from here. A break through 11,568 would be required to bring about a more bullish, wider outlook. For now, it looks likely we will see the index start to deteriorate from this region of resistance.

Dow rebound comes under the spotlight

The Dow Jones has rallied towards a potential trendline (only two touches) this week, with the downtrend of late coming into question. To the downside, we have a critical support level in 24,120, which if broken would likely spark another strong leg lower for the market.

However, for now, it is worthwhile seeing how we follow up on the fleeting rally through 24,668 and whether we respect this potential trendline resistance.

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