Levels to watch: FTSE 100, DAX and Dow

Global markets have been on the rise, yet with downtrends in place, there is a good chance we will see the sellers come back into play once again.

Stock exchange trading
Source: Bloomberg

FTSE 100 regains ground, yet further downside looks likely

The FTSE 100 is continuing its ascent, in a week that has seen the index enjoy a relatively calm trend despite all the political upheaval.

We look likely to continue pushing upwards, but the likeliness is that this is a retracement of the sell-off from the 7146 level. As such, until we break through that 7146 level, there is a good chance that this is a retracement before we turn lower again.

DAX rebound unlikely to last

The DAX is similarly climbing higher within a downtrend, with the price having hit the trendline resistance.

There is a very good chance we will see the market turn lower before long, in a bid to carry on the downtrend. As such, while we could see further short-term upside, a bearish outlook remains in play for the medium term. A break through the 11,568 level would be required to negate that view.

Dow resurgence expected to be fleeting

The Dow Jones is also strengthening within a downtrend, with the recent break below the 24,243 level providing a clue that the current rally is likely to be a retracement of the 26,071-23,877 sell-off.

Watch for a break below the most recent swing low to signify the beginning of the next leg lower. That level is currently 24,243. A break through the recent high of 26,071 is required to negate the wider bearish outlook.

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