FTSE eyes 50-DMA
The 50-day moving average is now the big hurdle for the FTSE, although it is now trading above the 20-DMA for the first time since 11 June.
If we can break through the 50-DMA, currently at 6810, then there seems an increasing likelihood that the 6880 level will be revisited. Still, until that is decisively broken it is hard to get overly-optimistic about the long-term prospects of the FTSE.
Nonetheless, the move upwards in the relative strength index signals buying pressure is on the up, a necessary precondition for further gains.
DAX supported by 9828
The clearance of 9900 yesterday and the breaking of the 200-hour moving average sends a definite indication that this index is back on form.
All eyes now shift to the 10,050 peak from 20 June, as the index looks to clear the 20-day moving average as well.
On the daily chart, 9828 and then 9800 will act as support, with the 50-DMA coming into play as well, but there seems little suggestion that the Germany 30 is in for any sustained weakness.
Dow could drift lower
The Dow Jones got to within a whisker of 17,000 yesterday, but it doesn’t look like there will be much time before the fabled number is breached.
Traders now have to play catch-up, and the result is we may see some drift lower in coming sessions, with some latecomers looking for better entry points. A drop back to 16,900 is possible, and even a fall to around 16,820 would not endanger the rally to any serious degree, as it would run into the rising trendline from the February trough.
Only a fall through 16,700 and then the 50-DMA at 16,690 would even raise the possibility of a more sustained dip for the index.