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

The FTSE 100 is still hobbled by sterling strength, but the DAX and S&P 500 look poised for fresh moves higher. 

All trading involves risk. Losses can exceed deposits.
Market data
Source: Bloomberg

FTSE 100 moves away from support zone

As highlighted in yesterday’s update, the FTSE 100 has begun to create higher lows, as it slowly moves further away from the 7300 support zone. Yesterday’s rebound from the lows, helped by sterling weakness, suggests that the index might be following its eurozone and US peers higher, but we are yet to see the 7450 area broken in a meaningful way.

With the index dropping back from 7400 we look to see if it will hold above 7340, or break the rising trendline from the late August lows. If the latter transpires, then the 7300 zone comes back into play again.

FTSE 100 chart

DAX shows no sign of retracement

Sellers have been unable to knock the DAX index back down after its surge higher during the past two weeks. We have seen little in the way of retracements since the index punched through 12,300 and then broke above 12,400 for the first time since late July. Upside targets now lie at 12,674, then 12,850 and 12,954.

Any pullback that holds above 12,300 should be viewed as a buying opportunity, with only a move back below this level altering the bullish outlook. 

DAX chart

S&P 500 reaches higher again

Once again we find ourselves at new highs for US 500, although the 2500 level still eludes the bulls. As with the DAX, there has been little downward movement since the gap higher at the beginning of the week, so we look for pullbacks towards 2480 or 2470 as potential places to add risk.

As noted earlier in the week, a move below 2450 is the bare minimum required to make the outlook more bearish in the short term. 

SP500 chart

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