Levels to watch: FTSE, DAX and Dow

Indices are moving higher again this morning, helped on their way by continued resilience in the Asian session and a deal overnight between Greece and the rest of the eurozone.

A man looking at data
Source: Bloomberg

The Federal Reserve-induced volatility of the last two days has now subsided. The dust has settled and left equity markets still looking bullish, especially in the US, where a run at new all-time highs looks entirely plausible.

Greece’s deal (some might say fresh capitulation) overnight, whereby the Greek government agreed to fresh reform measures to comply with the terms of the recent rescue plan, has also assuaged fears that late March might see a sudden resurgence of Hellenic problems.

FTSE momentum indicators still pointing higher

A continuation of the recent run on the FTSE 100 would see it move back above the December uptrend that was broken over a week ago. As Joshua Mahony noted yesterday, 6975 is still proving to be resistance and this is still the case this morning.

We can expect continued skittishness around this level but a close above here is likely in due course, especially given the strong momentum seen in the relative strength index (RSI) and stochastics, which point to a move above 7000 in time.

On the hourly chart dips towards the 20-hour simple moving average have so far been resolutely bought, so 6950 should see buyers step back in during the course of the morning.

DAX buyers return

Three days of declines seem to have come to an end in this index, as buyers enter the frame around 11,800. The March trendline is still in effect, providing additional support. We can expect some resistance around 12,000, but the real target is still at the 16 March high of 12,220.

On the four-hour chart the price has brushed along the 50-period exponential moving average (EMA), while the RSI and stochastics in this timeframe have turned firmly higher. Although 12,000 is proving a stumbling block on options expiry day, I do not expect this to provide much resistance in the short term.

20-EMA halts Dow selling

It was something of a quick move lower for the Dow Jones yesterday, but since then the 20-EMA on the four-hour chart has stepped in to prevent further selling.

The 18,100 level, yesterday’s high, might be a point of some resistance for the time being, with a close above here clearing the way for a move to the early March highs around 18,270.

On the downside the bullish scenario remains intact unless we move back below the 50-day moving average and the rising uptrend off the October lows.

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