FTSE 100, DAX and Dow eases back, yet wider bullish picture remains
FTSE 100, DAX and Dow has slipped lower, yet key support points towards a potential impending upside move.
FTSE 100 turning higher after decline into 61.8% retracement
The FTSE 100 saw sharp declines yesterday as it fleetingly created a new three-week high.
This recent decline is likely to be a retracement of the 7370-7621 rally, although we are yet to see a bullish signal to take us out of this current consolidation/retracement phase. That means the current rebound has a high likeliness of faltering once more, with a potential decline back into the 76.4% retracement at 7429. There is an argument on both sides here, and it makes more sense to look for longs at either the 76.4% level or on the break through 7544.
DAX consolidates after decline into 76.4% retracement
The DAX saw sharp losses yesterday, with the index slipping back into the 76.4% retracement level around 12,289.
Given the prior break through 12,465, there is a strong chance that yesterdays sell-off was a retracement which will be followed up by a bullish phase. We have since seen some strength come back into play, yet those gains are being eroded in early trade today. The key here is the ability to maintain the price action above 12,289, with a break below pointing towards a possible wider breakdown below 12,193. Until that happens, a more bullish picture is expected to emerge.
Dow finds support range bottom
The Dow Jones has once again declined into the 27,068 support level, with the index seemingly happy to trade within a range following the creation of a new record high earlier in the month.
The respect of this level points towards a likely bullish session today to maintain this range consolidation. Ultimately, we would expect the breakout to be bullish given the upside move into it. However, greater clarity on the next move comes with a break through either 27,068 or 27,370.
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