Levels to watch: FTSE 100, DAX and S&P 500

Indices have recovered somewhat, with a modest rebound providing some near-term optimism. 

FTSE 100 recovers from pullback

The rebound yesterday saw the FTSE 100 hold the 7600 level, and further gains would suggest a push back in the direction of 7800.

A recovery of 7761 would provide some reassurance, but if the index can continue to hold 7600 then it has survived its first serious pullback since the great move higher began back in late March.

DAX retakes key level in push higher

The DAX has retaken the 12,749 level noted yesterday as an important definer of near-term price action. From here, the 12,954 and then 13,200 levels come into play.

Having established a new higher low, following on from the sub-12,400 reading at the end of April, some tentative buying may develop. A push above 12,860 breaks the short-term downtrend from the recent high.

S&P 500 back above 2700

The brief trip below 2700 has come to an end, and now the S&P 500 must push on through 2740, an area that has held back upward progress throughout the month.

From there, the area around 2800, the highs from mid-March, come into view. US markets have been much more sanguine about the Italian crisis, so may well lead the way higher in coming days. A break below 2680 negates this more optimistic view, and would bring 2640 and 2600 into play.

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