Levels to watch: FTSE and DAX

With both the FTSE and DAX at critical resistance levels, are we seeing both indices turn lower or is this just a pause before we move higher once more?

Traders on a stock exchange
Source: Bloomberg

FTSE pulls back from record highs

The FTSE has pulled back following a rally towards the 7127 all-time high. This morning’s high largely matched the high of yesterday, which, given the proximity to the 7127 mark, provides a warning sign that we could turn lower.

However, for now the uptrend remains intact and unless we break below 7091, a bullish outlook remains in play. That said, perhaps it is prudent to await a break and closed candle above 7127 to gain confidence that a breakout is occurring.

DAX continues to show reversal threat

The DAX continues to show signs of weakness, as it oscillates around the crucial 11,434 level. The ability or inability to maintain price action above that level would have significant implications for the coming weeks and even months.

Signs are that we are at least struggling to overcome that level, and should we see the index break below 11,405, it could pave the way for a significant deterioration in the DAX. For now, we await the breakout above 11,484 or below 11,405 for a longer lasting directional bias. Until either happens, there is a clear range in play.

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