Levels to watch: FTSE 100, DAX and Dow

Short-term upside for the indices does little to boost long-term prospects, for now.

FTSE 100 pushing upwards after overnight decline

The FTSE 100 managed to break through the crucial 7050 swing high on Monday, with that break negating the short-term creation of lower highs and lows.

A break through the 7115 level would provide a substantially more confident bullish view, yet for now we are seeing a short-term bullish pattern playing out. The creation of a new higher high and subsequent retracement points towards this current rally pushing us through the 7087 and 7115 region. Should that occur, it would bring about a much more bullish picture for the index.

DAX turning lower from near-term resistance

The DAX has run into the 11,435 resistance level once again this morning, with the index failing to break through this near-term hurdle.

Should we see such a break it would point towards a likely wider period of upside. There is a strong chance that we are set for a period of strength, although a break above 11,851 would be required to bring about a wider bullish outlook. Until then, the further gains that could come into play in the short term look like a retracement of the 11,851-11,058 decline.

Dow rebounding after yesterday’s sharp sell-off

The Dow Jones has been trending lower over the past week, with the creation of lower highs and lower lows continuing apace.

The fact that we have now seen a break below the wider 76.4% retracement (24,689) adds further credence to this short-term downtrend. As such, further downside looks likely unless we break through the 25,036 swing high.

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