Levels to watch: FTSE, DAX and S&P 500

Yesterday’s break higher proved fleeting, with the indices pulling back. Interestingly, the US markets are now showing signs of potential weakness, while we await a breakout for the DAX.

Data board
Source: Bloomberg

FTSE pushing higher from support
The FTSE 100 is rallying once more this morning, after a pullback following yesterday’s break higher. Today’s price action has found support on the July 2015 peak of 6808, with another leg higher seeming likely.

From here, clearly the next resistance to contend with is yesterday’s high of 6829. However, it is clear that we are seeing a relatively gradual trend higher and as such, the continued creation of higher highs and higher lows is expected. As such, as long as price remains above 6803 and in particular 6782, a bullish outlook remains for a push towards 6829 and 6870.

Will DAX bounce break key resistance?
The DAX pulled back sharply from the 10,481 resistance level yesterday, with the index posting a low of 10,407. Interestingly, this morning has seen another pullback to that level, with price holding up to push higher once more.

Essentially, the next step will be defined by the breakout from this 10,481-10,407 zone, with an hourly close above or below setting the bias. Clearly, given the recent uptrend, there is reason to believe any such break will occur to the upside. However, given that 10,481 has marked a turning point for the market on three occasions now, it makes sense to await the break first. 

S&P 500 showing signs of weakness
The S&P 500 pulled back sharply following a brief foray into fresh territory yesterday. Interestingly, this morning’s bounce has been short-lived, with an hourly close below 2177 marking a bearish shift in sentiment given the failure to create a higher high.

As such, 2177 will be a pivotal level for the day, with the ability or inability to push through this likely to provide us with an idea of the next move. 

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