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

Yesterday’s surge has given way to some hesitancy, with European markets off their highs and US indices looking rather uncertain.

Source: Bloomberg

FTSE 100 pushes higher

Despite a sharp drop yesterday afternoon, the index has recovered and is pushing higher once more. Sterling weakness continues to play a part here. The target on the upside would be yesterday’s high around 7134, while a drop to 6950 could find fresh support.

Sustained price action below 6900 would indicate more weakness ahead. Much will depend on what happens with the US dollar this week, as to whether the bullish surge here pushes on into mid-October.

DAX looks to make gains

The index has been bouncing between 10,250 and 10,700, with the current state of play seeing it towards the top end of this range.

A swift dip this morning below 10,500 was met by fresh buying, so now we look to see if the index can push on through 10,600 and through yesterday’s high around 10,650. Above here 10,700 comes into play. A bearish move would need to clear 10,300 to gather real downward momentum.

S&P 500 finds key support level

A sharp reversal over the past two days puts the index back down to key support around 2140, where dips since 27 September have been met by buying. Further support is possible around 2137.

However, with the price now below the 50-day simple moving average (2167) and with the dollar strengthening, US markets may be in for a more difficult time. Bulls will need to push on through 2167 and then 2175, with the all-time highs of August at 2195 then in sight. 

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