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FTSE 100, DAX and Dow rally towards key resistance levels

FTSE 100, DAX and Dow rallies could come under pressure given recent bearish trends.

FTSE 100 Source: Bloomberg

FTSE 100 rallies into notable resistance zone

The FTSE 100 has been on the rise as a result of recent sterling losses, with the index rising towards a potential trendline resistance.

The creation of lower lows seen this month points towards a possible lower high here, but much will depend of the new prime minister (PM) announcement around midday. A break through 7590 would provide confirmation that this recent pullback is over, with the wider bullish trend coming back into play.

FTSE 100 chart Source: ProRealTime
FTSE 100 chart Source: ProRealTime

DAX rallies into trendline and Fibonacci confluence

The DAX has been on the rise this week, with the index rallying into a confluence of resistance that encompasses the 76.4% retracement and ascending trendline.

The recent trend of lower highs and lows points towards the possibility of a bearish move from here, yet EUR declines could bring about a bullish breakout. Thus, watch out for a break through this resistance zone and particularly the 1,2465 level to bring about a bullish theme once more. Conversely, the bearish trend does point towards the possibility that the index will start to weaken from here. Watch for a break below 80 on the stochastic to provide a tentative bearish signal.

DAX chart Source: ProRealTime
DAX chart Source: ProRealTime

Dow consolidates within triangle formation

The Dow Jones has been consolidating over the past week, with the price creating lower highs and flat lows to form a descending triangle pattern.

This points towards a potential leg lower before long, with a rally through 27,345 required to bring about a bullish signal for the index. Until that happens, another leg lower remains a distinct possibility over the short term.

Dow Jones chart Source: ProRealTime
Dow Jones chart Source: ProRealTime

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