Levels to watch: FTSE 100, DAX and Dow

A somewhat uninspiring period for the indices is pointing towards the possibility of further downside for European markets. The US indices are looking more positive, with the Dow attempting to rebound from a recent retracement phase.

FTSE 100 falling after early gains

The FTSE 100 managed to rally into another intraday higher high this morning, continuing the recovery/retracement phase that has been in play over the past two trading days. This points towards the potential for further upside, with the continued creation of higher highs and higher lows key to forming a deeper upside retracement.

Thus far we have hit the 50% level, and a break below 7476 would signal a potential end of this retracement phase. However, this index ultimately looks like it could run further to the downside unless we break above 7644. Therefore, a bearish outlook will likely come into play soon enough.

DAX rebound from Fib support under pressure

The DAX managed to rebound from the 61.8% retracement yesterday, following on from a bearish turn from another 61.8% retracement at 12,591. With the price starting to weaken again, there is a possibility of further downside over the near term, with a break below that 12,298 Fibonacci support level pointing towards further downside to come.

Ultimately, we would need to break below the 12,111 level to pull away from this wider descending triangle pattern. However, until then, we could see further downside to move back into the lower thresholds of this pattern.

Dow attempting to break higher from retracement

The Dow Jones has started to show signs of a potential bullish resurgence, with the index posting a higher low and now pushing above the crucial 26,032 swing high.

That points towards further upside to come, with a break back below 25,947 required to negate the recent tentative bullish signs.

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