FTSE 100 lags behind while DAX and S&P 500 still look to rally

Indices have not made much progress of late, but the overall move higher for the S&P 500 remains intact, even as the FTSE 100 lags behind.

FTSE 100 held back by sterling strength

The FTSE 100 has managed to stabilise above 7150 so far this morning, continuing a possible sequence of higher lows over the past three weeks. If it can hold this zone then a push back to 7250 may result.

The index’s problem stems from the current seesaw in sterling on Brexit headlines, which accounts for why it has lagged behind others over the past week.

DAX back at 2019 highs

It is crunch time for the bulls, at least in the short term. They have succeeded in getting the DAX right back to the top of its gains for the year, at 12,650, and must now keep the pace up.

But, having rallied sharply in just over a week, a sense of near-term exhaustion now prevails. A move back below 12,500 would suggest some near-term weakness, perhaps targeting 12,400 or 12,300. It is likely that any consolidation in the short term would still be a buying opportunity, with the DAX historically strong moving into the end of the year.

S&P 500 retraces after spike higher

The S&P 500 has drifted lower since spiking higher earlier in the week, but remains firmly in an uptrend. Further gains above 3000 will target the July record high just below 3030.

A fresh decline will head towards 2960, and a move below this would put the index back below the mid-September high and point towards further declines towards 2890. However, overall the bullish impression remains in place unless we see a move back below 2860.

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