Levels to watch: FTSE, DAX and Dow

A resurgence for indices provide a renewed bullish outlook going forward, with Europe leading the way higher.

Data chart
Source: Bloomberg

FTSE back on bullish tone
The retracement lower seen in the FTSE over the past three trading days appears to be over, with the bottom marked by a big 4-hour spinning top candle. The current respect of the 50-hour simple moving average (SMA) is uncanny and yet again, this has provided the support needed for a big move in the FTSE.

Thus a bullish outlook is re-established, with resistance levels of 6330, 6356 and 6368 worth looking out for. Should we see a close below 6288 and the 50-hour SMA, this would bring a possible warning sign that the bears are wrestling control back from the bulls. 

DAX breaks higher
The weakness in the DAX appears to be over, with the establishment of a higher low, marked by a long legged doji. A close above 10,979 seems likely and that would provide the bullish outlook for a strong end to the week.

A bearish bias would only return should price close back below 10,919. Resistance levels to note are at 11,000, 11,033 and 11,058. Support levels are at 10,919, 10,892 and 10,867. 

Dow looks to follow DAX example
The Dow Jones has suffered a lot less than its European counterparts over the past week and thus the recovery is coming from a higher base. However, we have not yet seen a break back through the near-term resistance level to create a new high above 17,862.

With that in mind, a close above 17,862 would bring a bullish outlook, with resistance levels of 17,915 and 17,978 in view. Alternately, a close below 17,775 would bring a more bearish outlook, with 17,686 and 17,655 the next support levels. 

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