Levels to watch: FTSE 100, DAX and S&P 500

Indices have managed to hold their ground of late, with both the FTSE 100 and DAX having enjoyed two weeks of gains. 

FTSE 100 extends gains into third week

After falling to its lowest level since December 2016, the FTSE 100 has staged an impressive recovery, fighting hard to hold above 7000 and rallying for the past two weeks.

The move back above 7127 is an encouraging sign, and if we can hold these levels then the possibility of a move back towards 7400 and higher increases. A drop back below 7100 would be a bearish sign, raising the prospect of a retest of the lows around 6800.

DAX aims for further gains

The DAX has found a bottom around 11,700 so far this year, and while it has yet to clear the zone of resistance from 12,400-12,600, the index has posted a strong bounce from its lows.

If the momentum can be sustained, and if the index can clear 12,600, then a steady push back above 13,000 could be on the cards. Alternately, a loss of momentum would suggest a move back towards 11,700, and if this breaks things could get quite ugly.

S&P 500 hopes for rally after tough week

Risk appetite here has lived and died on trade war rhetoric. Last week for the S&P 500 saw a see-saw week that, overall, provided little clue for market direction.

However, the fact that the index has not yet retested the February low at 2530, and created a higher low at 2553, provides some hope. A possible downtrend from the all-time high and the March high could see the index rally to 2750 before encountering trendline resistance. Near-term support lies at 2553 and then 2530. 

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