Levels to watch: FTSE, DAX and Nikkei

With the US out of the frame, markets may be vulnerable to losses, with the FTSE 100 falling back from yesterday’s highs.

New York Stock Exchange
Source: Bloomberg

FTSE 100 foiled again by 6850

A decent rally yesterday pushed through the key 6850 area, but once again there has been no follow through. We now look to see whether the price can hold above the rising hourly trendline.

If it breaks through here, and pushes on to 6750 we may be seeing the beginning of a downward move, perhaps down to 6660. A rally needs to clear 6850 and then close above 6900 to suggest a test of 7000 is on the way.

DAX seeks to close above 10,800

Yet again a dip towards 10,600 brought out buyers, so the 200-point range here goes on.

Bullish momentum has been drying up over the past few days, so a close below 10,600 could mark the start of a bigger move lower, perhaps down to 10,434.

As before, a close above the vital 10,800 area opens the way to 11,000. 

Nikkei powered by weakened yen

A weakening yen continues to fire the breakout rally in this index, having smashed through the descending trendline that runs from the August 2015 high. Like US indices, the price is heavily overbought, but so long as the dollar keeps rising the price shows no sign of stopping.

Since 11 November the 50-hour SMA (currently 18,264) has provided strong support, so a pullback to here may bring out fresh buyers. A close below 18,157 is needed to suggest a leg lower is beginning. 

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