Levels to watch: FTSE, DAX and Dow

Indices have opened the week with strong gains, particularly in Europe, confounding those who expected further selling. 

Data charts
Source: Bloomberg

FTSE looks to break bearish trend
The FTSE 100 needs to push on towards 6300 and clear Friday’s highs to reverse the current bearish path. A failure to build on Friday’s gains would suggest the index will continue to move lower, through possible support at 6238 and then on towards 6161. A move up through 6300 would then head towards resistance around 6340 and 6390. 

DAX upward momentum may stall
European markets have extended the gains made on Friday so far today, with the DAX pushing up towards the 10,870 area where progress stalled. This coincides with the descending trend line off the April highs, so it is not surprising to see upward momentum struggle around here.

If the price does break higher then resistance around 10,955 and then 11,096 (the 200-day simple moving average) comes into view. Downside targets lie around 10,706, and the 10,544.

Dow bounces higher
Friday’s bounce reversed the bearish momentum seen on Thursday and puts the index back on course to test the 17,900/18,000 area that was such a problem throughout November.

It will take a daily close above 18,000 to indicate the index is now firmly moving higher. Downside targets lie around 17,574 and then 17,310, if bearish momentum does develop. 

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