Levels to watch: FTSE, DAX and Dow

Indices enjoy a strong start to proceedings, yet with the US and European markets pointing to different outlooks, will we see a divergence or is one side going to lead the other to change direction?

US trader
Source: Bloomberg

FTSE turning from Fibonacci resistance

The FTSE 100 looks to be turning from the key 76.4% resistance level this morning. Clearly we have seen a turn of fortunes, with last week’s rally turning into negativity. However, there is no sign that this is a complete reversal rather than a retracement.

That being said, it makes more sense to be bearish for another move back below 6430 than a break through 6581. Should we see an hourly close above 6431 then this would signify a shift back to the bullish short-term outlook of last week. 

DAX rally unlikely to last

The DAX is also enjoying a strong period following yesterday’s early sell-off. However, crucially there has not been any break to signify that the sell-off is over and as such, another move lower seems likely.

Shorts would be preferred at the 76.4% retracement (9478), but ultimately a bearish view is held unless we see an hourly close back above 9533. The obvious key support level in view is yesterday’s low of 9300.

Dow bucks the trend, with a bullish break

The Dow Jones has led the way higher, with yesterday’s move back through the crucial 17,876 resistance level.

The subsequent consolidation above that level points towards another leg higher, with a move through 17,933 pointing towards a rally into 17,978 and 18,019 resistance. 

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