Levels to watch: FTSE, DAX and Dow

Gains continue, with indices looking set to break out of their consolidation patterns. 

Two women walking past a data board
Source: Bloomberg

FTSE buyers in ascendency

The bounce continues for another day, pushing towards resistance at 6272 and then on to 6348. With daily stochastics still bullish the longer-term outlook points to more gains, but with hourly indicators at overbought levels it may be prudent to wait for a move back to 6200. Rising support on the hourly trendline is around 6090, but that is now some distance away. Buyers seem to have the upper hand for the time being, with the index slowly moving out of consolidation territory.

FTSE 100 chart

DAX hourly RSI overbought

Here too buyers are in control, pushing the price towards resistance at 10,540 and then 10,707. With three days of gains behind us, the way looks clear for an eventual move back towards the 50-day SMA at 10,950. The hourly RSI is now heavily overbought, so latecomers may not wish to chase this move but wait for an intraday pullback towards 10,300. 

DAX chart

Dow eyes late-August highs

The next target for the bulls would be around 16,700, the highs for late August. A move through here would confirm that the consolidation is over and that a further rally is in order, with the 50-day SMA at 17,283 a possible target. So long as the index holds above 16,000, the buyers remain in control and dips will be there to be bought, rather than rallies being sold. 

Dow Jones chart

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