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Levels to watch: FTSE 100, DAX and Dow

Indices look set for short-term weakness, yet given the recent bullish signals, this could provide us with a strong buying opportunity.

IG Analyst

Publication date : 2017-09-28T09:27:34+0100

Stock exchange

Source: Bloomberg

FTSE 100 pauses after bullish breakout

The FTSE 100 managed to break higher from a period of consolidation yesterday, with the price pushing through both trendline and horizontal resistance.

We are now seeing the index drift lower, yet given the gains we have seen of late, it looks likely that further upside is around the corner. With that in mind, short-term weakness is seen as a buying opportunity unless the price breaks back below 7271.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX looks set for short-term pullback

The DAX has been testing a near-term support level today, which, if broken, would point towards a deeper retracement in the near term. An hourly close below 12,667 would point towards a potential move into Fibonacci support, around 12,637.

However, ultimately, any pullback would be perceived as a buying opportunity, with an hourly close below 12,596 required to negate the uptrend.

DAX price chart

DAX price chart

DAX price chart

Dow turning lower from resistance

The Dow Jones is weakening this morning following a rally into the notable 22,365 resistance level. The 22,323 support level is going to be key in signaling that we are likely to return to the lower bound of the recent price action, around 22,281.

For now, the sideways price action is expected to persist until we get a strong breakout signal. To the upside this would be clear, given the strength of the 22,365 resistance area. However, the somewhat inconsistent lows make a bearish breakout more difficult to spot. For now, consolidation is expected to continue apace.

Dow price chart

Dow price chart

Dow price chart

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