Levels to watch: FTSE, DAX and Dow

Yesterday’s gains fueled by French election have set us up for further upside, with the Dow and DAX looking particularly bullish.

New York Stock Exchange
Source: Bloomberg

FTSE rallies into Fibonacci resistance

The FTSE has seen an incredible start to the week, with the French election sparking a surge into and through the key 7253 resistance level. While that break has provided us with a more bullish signal, the fact remains that the index remains within a downtrend given the creation of lower highs and lows.

As such, we would need a break through 7346 to negate the potential for further downside. Watch out for the response to the 76.4% Fibonacci resistance as a means to understand whether this is just another retracement or a wider recovery.

DAX punches to new all-time highs

The DAX managed to break through the previous all-time high of 12,408, pushing into new territory. We are now seeing the index start to consolidate, where that 12,408 comes back into play as potential support.

Any downside is seen as temporary, with further upside likely. However, given the size of yesterday’s move, it could make sense to see how trade works out in terms of giving us a swing low to utilize for a stop loss.

Dow wedge breakout set to persist

The Dow Jones broke higher from a falling wedge pattern on Friday, with yesterday’s rally providing an extension of that move. We have seen further gains this morning, with 20,888 the next key resistance level ahead.

With that in mind, pullbacks are expected to be temporary, with an uptrend coming into play from here.

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