FTSE 100, DAX and Dow rally towards key resistance

FTSE 100, DAX and Dow on the rise, yet key resistance levels lie ahead for this latest bullish surge.

FTSE 100 rises towards key resistance level

The FTSE 100 managed to rise beyond the 76.4% Fibonacci level yesterday, with the index closing in on the crucial 5944 level. The rise through 5849 highlights the possibility of further upside, with higher lows continuing to play out.

Ultimately, we will need to see the price break out of that pattern to start asking questions about the longevity of this rally. However, until then it looks likely we will continue this short-term rise given the break through 5849 and respect on trendline support. Additionally, we will ultimately need to see a break through 5944 to break from this consolidation phase.

DAX rises into key resistance zone

The DAX has also gained ground, with the index moving into trendline resistance. With higher lows and lower highs currently in play, the index is trading within a symmetrical triangle formation.

Given the existence of the trendline and horizontal (10,773 and 10,825) resistance levels, this current bullish move could come under pressure before long. Ultimately, we need to see a break through 10,825 to bring about a bullish continuation signal. Until then, there is a good chance that the current upside is limited as the price rolls over to continue this consolidation phase.

Dow Jones rises beyond Fibonacci resistance

The Dow has managed to break through the 76.4% Fibonacci resistance level overnight, with the price easing back a little since. That break points towards a potential bullish break through 24,447.

However, given the break below 23,088 last week, there is also still a chance we are looking at a retracement until the price rolls over once more. As such, it makes sense to either await a bullish break through 24,447, or a bearish intraday reversal signal such as a break below yesterday’s swing low of 23,842.

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