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

UK markets return from the bank holiday, as European markets look to recover and the US remains range-bound.

Data
Source: Bloomberg

FTSE 100 looks to push higher
As the UK returns from its long weekend, UK traders will have to play catch-up with the market reaction from Friday’s speech. The bounce off 6800 seems to suggest that the index will follow its peers higher, perhaps pushing on through the 6850 area where gains stalled on Friday.

Above here, it will target the 23 August high around 6880, and then on to 6950, last seen in mid-August. If bearish momentum revives from here then we look to the lows of last week at 6780, and below this on to 6650.

DAX set to bounce back
Having broken through the descending channel that predominated over the past two weeks, the index may now be set for a bounce back towards 10,650, the high from last week. From there we look to 10,800 and then the August peak.

A move back inside the channel would suggest a drop down to 10,460, and then down towards 10,300, the bottom end of the current formation. 

S&P 500 stays in the same region
Friday’s sudden slump and then the rebound on Monday leaves the index in essentially the same place that it has been all month. Dip buyers have been consistently rewarded, but the index now needs to move above 2185 to put a more bullish gloss on proceedings.

Above here, the next target would be 2195. The rapidity with which the attempted break lower on Friday was reversed suggests that the buyers remain in charge here. 

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