FTSE 100, DAX, and Dow expected to build on gains
FTSE 100, DAX, and Dow are drifting lower, yet with wider uptrends still in play, further upside looks likely before long.
FTSE 100 continues to grind lower in retracement phase
The FTSE 100 has been drifting lower since Thursday’s peak, with the index seemingly in retracement mode following a period of gains around the turn of the month.
Thus, while we could see further short-term downside, it would be unlikely to signal the beginning of a wider bearish reversal for the index. A break below 7370 would signal such a move, with further short-term downside looking like a buying opportunity unless that threshold is broken. To the upside, a break through 7572 would bring about a resumption of the bullish trend.
DAX breaks through short-term support level
The DAX has declined through the 12,482 support level overnight, with the index now seemingly retracing the wider rally from 12,169.
Once again, the wider bullish trend remains intact, and thus while we could see further short-term downside, it is likely to be a retracement of the 12,169-12,662 rally. Conversely, a rally through 12,552 would bring about a more bullish short-term picture for the pair.
Dow continues to decline, as index retraces into support
The Dow Jones is continuing its declines, as the index falls back towards the next notable level of support at 26,615.
However, it doesn’t look like we are retracing that 26,615-27,034 rally, but instead the 26,433 level represents the point we are retracing from. That means we could see further downside for the short term, yet unless the price breaks below the 26,433 level, a bullish reversal looks likely before long. With the price currently trading around the 61.8% Fibonacci retracement level (26,663), a break below here points towards a move into the next notable support levels of 26,615 and 26,575.
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