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

After days of consolidation it looks like the buyers are back in charge, at least in Europe and the US.

Source: Bloomberg

FTSE 100 could see 6945

The index has clawed its way off the lows of Monday’s session, but there is plenty of resistance in the short term. The 7194, 7210 and 7236 levels all stand in the way of further gains with the index needing a daily close above 7250 to indicate that a new leg higher is underway.

Bears need to push the price below 7130, which would open the way to 7020 and then 6945.

DAX eyes 11,920

European markets have rediscovered their zest for life, with the DAX pushing through its recent high. 11,782 and 11,920 are the next targets to watch on the upside, but those looking for an entry may want to wait until a dip appears before looking for a fresh long position.

A failure to hold above 11,650 could see a return to the bearish outlook here, potentially heading back to 11,482 and then 11,260. 

S&P 500 could see progress stall

The buyers have reasserted control here as well, with futures already hitting new highs. If the rally is to be reignited then it needs a firm close above 2285. Otherwise, a drop back below 2280 would risk a swift move to 2240 and 2200.

The consolidation appears to have run its course, but earnings season will likely act as a handbrake on further progress for the index.

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