Levels to watch: FTSE, DAX and Dow

Risk appetite has staged a massive rebound ahead of important US bank earnings, but now the buyers need to keep momentum flowing. 

Source: Bloomberg

FTSE 100 looks to make gains

The index took a look at the area below the rising September trendline, but a swift bounce in the second-half of the day meant that this level is holding for now, with a good attempt by buyers to reverse the bearish momentum of the previous three sessions.

If the price can get back above 7050 then a more optimistic view might prevail. However, a failure to get back above this level would likely send the index back to 6980 and then through the trendline to 6950.

DAX puts bulls in control

Here the bulls have stepped in to get the index back above the crucial 10,450 support area. The index needs to stay above here, and then get back above 10,600, to revive the broader uptrend.

If it fails to push on and moves below 10,450, we look to the lows of Thursday at 10,350, and then down to the 100-day simple moving average (SMA) at 10,256.

Dow recovers losses

The index in general staged an impressive recovery, with the Dow Jones moving back above 18,000. The area that prevented further downside in September, ie at 18,000, remains intact ahead of key US bank earnings later today.

Bulls need to get the price back above 18,150, and ideally close above 18,203 (the 100-day SMA) in the next couple of sessions, to avoid fresh bearish momentum developing.

Sellers would need to get the price below 18,000 to be sure of a firm direction, with the 200-day SMA at 17,647 the key target to watch for. 

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