Levels to watch: FTSE 100, DAX and Dow

Recent gains have started to falter, with stocks turning lower in early trade today. However, will the short-term uptrend dominate, or will the wider bearish trend come into play once more?

FTSE 100 rallies back into Fibonacci resistance

The FTSE 100 has rallied back into the 7000-mark once more, with the 76.4% Fibonacci retracement coming into play again.

The wider downtrend would require a break through 7146 to negate, and until then there is a chance we could turn lower once more. Given we are currently respecting that Fibonacci resistance, it looks likely that we will see the index drift lower, yet we would need a break below 6798 to bring about a wider bearish view once more.

DAX rolling over after recent rally

The DAX has seen a sharp ascent since breaking through the 10,987 resistance level.

From a wider perspective, a rally through 11,570 would provide confidence that we have bottomed out. Until then, there is still a chance that we are retracing the wider 11,570-10,202 sell-off. The 76.4% retracement is that worth noting, with the price having started to weaken from that region. Thus, there is a good chance that we will see further downside coming into play today, with a break through Friday’s high required to start building on the possibility that we are going to head towards that 11,570 mark.

Dow continues to gain ground

The Dow Jones has remained on a bullish path, with the index hitting a new five-week high on Friday. The wider downtrend remains intact until we break through the 26,071 level.

However, until then, we are waiting for a signal of whether this is a retracement or not, with the respect of the 76.4% retracement providing us with clues. Thus, while the continued creation of higher lows does point towards further upside, watch for Fibonacci resistance at the 25,002 level as a potential source of bearish movement.

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