FTSE to target 6835
Having cleared the 6770 level with such aplomb, the relative strength index is now around 78 and registering its most oversold level since February.
The index looks set to target 6835 now, and support should come from the 6800 and 6770-80 level below that. A puncture of the resistance puts us on track for a move toward the 6850 highs.
Dow could test 4 April highs
A record closing high for the Dow Jones last night, despite the additional tapering of quantitative easing, has put the index on a mission to tackle 16,600. Given the recent range, a close through here could see a measured move towards 17,000 in short order.
Beware of a bull trap, however, the daily and four-hour RSI are showing some negative divergence. It might be premature to expect this level of bullishness today particularly with the all-important non-farm payrolls out tomorrow.
Nevertheless, while the momentum is still there, we may see the highs of 4 April tested today upon a break of 16,608. Pullbacks can be expected to remain confined to the 16,570 level, with the 50-hour moving average coming below that at 16,540.
DAX RSI showing upside momentum
The DAX has also overcome some resistance in the 9600 level. The 24 April highs are the ones to watch now at 9647, and with the daily RSI still showing upside momentum a break above targets the 9721 level.
Support lies at 9590 then 9553.