Levels to watch: FTSE, DAX and Dow

Yellen provides a lift for global indices, providing a renewed bullish view within this recent uptrend.

Source: Bloomberg

FTSE rallies into key resistance
The index gained a welcome leg higher curtesy of Janet Yellen yesterday, with the index rallying into the crucial 6220 resistance overnight. This morning is seeing another challenge of this level and thus the reaction at 6220 will provide the state of play for the day.

A closed hourly candle above 6220 would provide expectations of a breakout rally, with 6324 the next major resistance level of note. Alternately, a failure to break 6220 could see us continue within the 6100-6220 range that has dominated trading over recent weeks. A break seems likely given the buoyant mood, yet price action always dictates the state of play.

DAX rallies to new two-month high
The index has also seen a very strong move overnight, following on from the bounce from 9900 on Tuesday. We are currently seeing the index move slightly lower, yet with clear higher highs and lows, any pullback will likely be seen as a buying opportunity.

Should this retracement continue, then the Fibonacci levels should be tracked, where 9957 (61.8%) and 9930 (76.4%) in particular would represent very attractive levels to go long at a better price. The bullish view holds unless we see an hourly close below the Tuesday low of 9890. Next resistance levels of note are 10,121 and 10,166, with support at 9928, 9900 and 9615.

Dow rallies through trendline resistance
Yesterday saw the Dow rally through a historical descending trendline, and we are now seeing it approach the upper-end of a rising wedge that has been in play over almost two months. The index is currently challenging the 17,399 resistance set overnight following a 23.6% pullback.

A bullish view is clearly in play here, with higher highs and higher lows being created. Thus unless we see the index break back below 17,187, another leg higher seems likely before long. In particular, an hourly close above 17,399 would provide a good breakout signal. Resistance levels of note are 17,399 and 17,572, with support at 17,348, 17,187 and 17,117.

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