Levels to watch: FTSE 100, DAX and Dow

Both European and US indices are turning higher in early trade, with the further breakdown in US-China trade relations failing to drive markets any lower.

FTSE 100 rebounds from support zone

The FTSE 100 failed to break into a new intraday low yesterday, despite sharp selling into the evening.

Early morning gains today look like they could provide some hope for bulls. However, we would need to see a break and close above the 7325 resistance to provide a more bullish outlook. Alternatively, a break below the 7220 support level would signal a likely next leg of this recent breakdown. Should that come into play, watch for a move towards the 76.4% retracement at 7092.

DAX rebounds after wedge breakdown

The DAX has also managed to rebound this morning, following on from a wedge breakdown.

There is a chance that this move lower is a retracement, and a break through the 12,136 resistance level would pave the way for another leg higher for the index. That may only be part of a wider retracement, and thus it makes sense to look for a potential move towards a deeper level, such as the 61.8% (12,320) area.

Dow pushing higher after recent decline

The Dow Jones is similarly elevating in early trade, with the index reversing higher after a decline of over 50%.

The ability to break through the 26,223 level is going to be key in determining whether we are set for another leg higher or not. Ultimately, as long as we do not see a break below 25,749, any near-term weakness would be a buying opportunity.

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