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However we are heading towards a big level on the DAX, which could be a stumbling point.
FTSE sees short-term pullback
A short-term pullback is developing here from Friday’s highs, which could afford an interesting possibility.
For now 6770 is the top in this market, as the index works off the daily overbought condition. Immediate targets on the downside are 6700 and then 6680, with a bigger move taking us back to 6650.
A close back through 6770 would put this index back on course for its highs around 6900 as the final month of the year gets underway. Only sustained action below 6600 negates the broadly bullish case.
DAX boosted further by French data
We have seen the index rallying away once more today, thanks to some surprise French economic data that has provided a further excuse for equity buying.
However, while all seems rosy – and the potential declining trend from the July highs has been broken – the index still needs to close above the September highs just below 9890. If it achieves this, and it is only a short distance away at the time of writing, then the gate is open for a test of the zone above 10,000 that marked the limit of progress during the summer.
The hourly chart has seen the DAX become overbought once again, with no desire to go back below 9800. Ideally a healthy move back to 9700 would take the upward pressure out, but for the moment 9780 and then 9730 are immediate potential support levels.
Dow eyes possible test of 17,760
Early trading so far has seen US futures move back to the highs of yesterday, but like the FTSE 100 they are still below Friday’s high.
A failure to move above Monday’s high on the hourly chart for the Dow Jones will mean that we could be in for a possible test of support around 17,760 and then 17,695, while the upside target is still the 17,900 zone, where the market topped out on Friday.