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Levels to watch: FTSE, DAX and Dow

Yet another leg higher for indices, as markets extend the bull run. However, the potential for a retracement is clearly a threat.

Data reflected in a persons glasses
Source: Bloomberg

FTSE pushes higher once more, yet will support hold up?

The massive FTSE bull run seen over the past week continues apace today, with a strong start to the tune of 70 points in the last three hours. No doubt, this is going a long way to bring a more bullish sentiment to trader’s mindsets, especially given the break back above 6300. However, the current candle is showing signs of a possible pullback, and with the likes of the stochastic and MACD histogram rolling over, I believe there is a possibility of a pullback to come.

The key is that support level of 6344, which needs to be broken for a move back to 6310. Should the price find clear support from that level, another leg higher seems feasible, yet a move below would likely to lead to further losses. Thus I see this 6344 level as being pivotal in the morning session.

FTSE 100 chart

DAX continues to track higher

The DAX also continues to move higher, with the 50-hour SMA seemingly providing strong support to the downside. Similarly, the key support level to watch right now is yesterday’s peak, at 9954. Be aware that there is a strong area of resistance above current price action, with the 22 September peak of 10,018, along with the key support level of 10,068. For this reason, I am bullish while it remains above 9957, yet only for the short term as I believe we will find enough resistance between 10,018-10,068 to send the price lower once more. Should it break below 9957, I would be looking at 9918 and 9890 as key support levels, along with the 50-hour SMA.

DAX chart

Dow to sell off within short-term range?

The Dow Jones has also seen strong upside this morning, yet unlike its European counterparts it appears to have a clear range that remains in play. Thus, while the price remains below 16,863 there is a strong likeliness that we could see the index sell off once more. A break above 16,863 would call for a move towards 16,968, yet until we see that break I am looking for a move lower towards the 16,700 area.

Dow Jones chart

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