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

A broader risk-off mentality prevails across markets, but the FTSE 100 and DAX are still holding key support.

FTSE 100 fights to hold 7300

Yesterday saw the FTSE 100 try to push on above 7360, but fail once again. Now we look to see if the 7300 area can hold as it did last Friday. If so, then we have an index stuck in the 7300-7360 range, with the next move determined by a breakout from these levels.

Above 7360, 7420 and then 7450 are potential areas of resistance, with a close above here suggesting a more substantial rally towards 7550. Below 7280, the index will head towards 7260, and then 7195.

DAX tests bottom end of range

Resistance continues to be provided at 13,100, with DAX heading back to the bottom end of the trading range that has prevailed since mid-November, around 12,844.

If this holds, then we look for a bounce back to 13,100. Above here, 13,216, the 21 November high, is a potential area of resistance. The next area of possible support is 12,678.

S&P 500 drifts lower once more

S&P 500 continues to pull back, with 2604, 2597 and then 2588 the next areas to watch for potential support.

Overall, this drop in recent days merely provides an excuse for longs to add to their positions ahead of a final year-end rally. Only a close below 2580 would materially change this outlook in the short term.

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