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

After a quiet session yesterday, buyers are returning, as fears of a June Fed move recede.

US trader
Source: Bloomberg

FTSE 100 aims for April high
Gains petered out just below 6300 at the end of last month, but a break higher through here would signal a rally towards the mid-April high around 6430. This is also the key 6430/6450 zone where gains faltered in October and early December last year, so over the longer-term a move above here would be regarded as very bullish.

The next real target on the way higher would be 6800. A break back below 6200 would invalidate the bullish outlook, and put the index back on course to test the 6060 support zone that has prevailed on the downside since late March. 

DAX stuck below downtrend line
Continued euro strength has meant that eurozone indices have not been able to push higher in recent sessions, despite strength in UK and US equities.

The DAX is currently in a short-term downtrend off the May highs, so any bounce back to 10,220 may be regarded as a selling opportunity, with a possible move back towards 10,030 and the 50-day simple moving average (SMA).

A close above 10,250 on the daily chart would then suggest a move to 10,375, the late May high, and then on to the late April peak of 10,500.

DAX watchers should note the index is still stuck below the downtrend line off the April 2015 high, so this line (currently around 10,680) should be watched closely in the event of a rally in coming weeks.

S&P 500 puts bulls on front foot
A stronger session for the index yesterday put the buyers back in charge, helped by Janet Yellen’s speech and a lack of references to a June move.

With the push above the April high, the focus is now on 2130/2140, the peak from the high summer of 2015. A close above here would put us in fresh all-time high territory.

Dips look to be buying opportunities once again, with the weaker dollar making life easier for bulls. Only sustained price action below 2090 dents the current bullish outlook. 

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