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

The FTSE is poised to break out of its recent downtrend, while US markets remain under pressure. 

DAX trader
Source: Bloomberg

FTSE 100 has begun approaching 7409

An early push higher this morning continues the sequence of higher highs and higher lows that has prevailed since 20 April. As noted yesterday, 7409 is the point at which the downtrend off the all-time highs is definitively negated, and the FTSE 100 has already begun knocking on that door this morning. A close above it leaves the price clear to push on to 7448.

A drop below 7321 would start to indicate the possibility of further weakness ahead, with a drop through the rising trendline off the April lows pointing the way to a firm bearish development.

FTSE chart

DAX a break above 12,785 needed here to challenge the all-time high at 12,850

Positive momentum has ebbed away from the DAX throughout the week, although 12,659 continues to hold as short-term support. A drop through here raises the prospect that the price will return to 12,408, the previous all-time high.

Meanwhile, 12,785 has held back upward progress over the past few days, so a break above here is needed before the price can move on to challenge the all-time high at 12,850.

DAX chart

S&P 500 resistance has been 2398-2403 this week

US futures are indicating more weakness to come, after it failed to push on above 2400 earlier this week. The zone around 2380 has acted as support over the past three weeks for the S&P 500, so we will need to see a daily close below 2378, and ideally below the 50-day simple moving average (SMA) at 2368 to indicate that more downside is on its way.

Resistance this week has been 2398-2403, so buyers will need a daily close above here to indicate a definite breakout is in progress. 

S&P 500 chart

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