Levels to watch: FTSE, DAX and Dow

Indices enjoyed a strong day yesterday, and today sees them making further gains. Greece appears to be on the verge of a deal, removing one key area of worry for the time being. 

A man looking at a computer screen
Source: Bloomberg

FTSE breaks higher

Having smashed the 6800 level yesterday, the FTSE 100 is busily consolidating above this point and, indeed, pushing on once more. The next target to watch in the short term is 6870, and after this we look towards the 100-day SMA at 6917 as the next destination if bullish momentum continues. With daily stochastics now firmly bullish, this index has once again moved into a ‘buy the dips’ phase. A rising hourly trend off the 18 June lows should see support come in around 6770, but if we are not afforded the luxury of such an obvious dip, traders should use intraday stochastics to aid identification of promising dips.

DAX reaches October trendline

DAX bulls should be cautious in the immediate term. We have reached, from below, the rising October trendline. When we last arrived at this point, on 11 June, the index rapidly sold off, and we could witness a similar event here. Nonetheless, given that Greek talks appear to be moving in the right direction, a short-term drop will provide a dip for buyers to avail themselves.

As with the FTSE, a rising hourly trendline from last Thursday’s lows means we have a clear area of possible support, which in this case would be around the 11,330 area. A move back through the October trendline on the daily chart provides us with the possibility that the index will target the May highs around 11,875. A close above the 50- and 100-day SMAs (11,524 and 11,544 respectively) would add to the bullish case.

Dow girding itself for new highs

The rally goes on here, helped along by optimism relating to Greece. Having bounced off the 50-day SMA (18,050) yesterday, the index is now free to test the all-time highs of May above 18,300. Pullbacks on the intraday chart should continue to be bought, with the only risk being that US data this week, including durable goods today, come in better than expected and cause another bout of dollar strength. 

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