Levels to watch: FTSE, DAX and S&P 500

Although the week starts quietly, a good finish for US markets on Friday has meant the Asian session was strong, and this has carried over into Europe.

Trader looking at data screens
Source: Bloomberg

FTSE 100 claws its way higher

The index is nosing its way above 6800, notching up new highs for the year thus far. The next area to watch would be the June 2015 highs around 6860.

The strong leg higher at the end of last week would seem to suggest that ‘buy the dips’ remains the approach here, with some support around 6774, and then down to 6700. 

DAX to challenge the downtrend

The DAX has been one of the best performing eurozone indices so far this year, comfortably outdoing the CAC40. The bounce from last week has meant that, once again, the index is challenging the downtrend line off the April 2015 highs.

At the beginning of August the index hit the line and then retraced. With the price overbought and few catalysts on the calendar we may see some hesitancy, but after a strong bounce since the July lows it makes sense to stick with the trend. 

S&P 500 dips may entice buyers

Friday’s bounce has carried the index back to the top of the range seen at the end of July, with positive momentum returning. Any dip back to 2150 may well see fresh buyers emerge, and it would take a close below 2120 and the 50-day simple moving average to really indicate the bounce has run its course. 

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