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Levels to watch: FTSE, DAX and Dow

Indices bounce back again after a consolidation and retracement overnight. Are we going to see another big day in the green?

US trader
Source: Bloomberg

FTSE pulls back from historical range top
The FTSE rally hit the buffers yesterday as the index reached the crucial 6237 level (March peak) which previously marked the top of a month-long range. This does not mean we will be back trading in this range once more, yet it does mean we will need a breakout above this level to set us on our way towards further gains.

For now, we have got a clear short-term trendline support in play. This should hold given the bullish price action leading into the current formation. However, an hourly close below 6142 would provide a more bearish view. Until that happens, a bullish outlook is in play, with 6200 and 6237 the next levels of resistance to watch out for.

FTSE 100 daily chart

DAX expected to break higher from consolidation
The DAX has been consolidating over the past 24 hours, following on from a sharp rally in the early hours of yesterday. This current range looks like a continuation pattern, which would be expected to resolve with a break higher given the trend coming into this pattern. As such, a bullish view is in play, with any move down towards the lower end of the range of particular interest for longs.

An hourly close below 9900 would point towards a deeper retracement, with 9838 the next near-term support level. However, should we indeed see the break higher, then 10,038 and crucially 10,121 would be the main levels to be watching out for to the upside.

DAX daily chart

Dow bouncing back after overnight retracement
The Dow Jones has also seen a retracement throughout the US session and overnight, following the sharp gap higher over the weekend. Crucially the index fell back to the 17,777 level before rallying once more.

We are now seeing the index moving higher, providing confidence that we should see further gains as we move through the morning. The next key resistance level is 17,948, where a break back below 17,777 would be needed to negate the current bullish outlook. 

Dow daily chart

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