Choppiness will probably be the order of the day unless we see a concerted break through the 6400 and the 9000 levels on the FTSE and DAX respectively.
FTSE stuck in range
The FTSE is stuck in a range capped by the 6400 level but buoyed by the 100-hour MA at 6320 with the 200-H residing at the 6300 level.
We may look for a measured move should price action breach either of these levels. Getting back through the 6420 level would reinstate the long-term trendline support from the March 2009 lows and would be a significantly bullish move which puts the 6485 level firmly in the frame in the near term.
A move back through 6266 would see the FTSE make inroads towards the recent lows at 6070.
DAX lacks momentum
The neckline of the long-term head and shoulders pattern has been pierced in early trade, but still price action lacks the momentum to remain above the 9000 metric with the strong resistance form the longer-term trendline remaining a key barrier for the German index.
By contrast, the hourly chart is displaying that the inverted head and shoulders pattern is completing; thus any rise through 8980 will target 9059 in the near term with the ultimate target around the 9400 level. The short-term RSI is looking a little overbought, so we may see the DAX retrace to 8950 before making a move higher. 8850 is also acting as support below this.
The fact that prices are above all three moving averages on the same timeframe puts the bias on a move higher.
Dow struggle to retake 16,600
The Dow is having some difficulty retaking the 16,600 level despite moves towards 16,670 yesterday. This is the 61.8% retracement from the highs of 17,100 to the recent lows around 15,850. The 100 period MA on the H4 chart is also keeping a ceiling on prices. A move through here targets 16,785 and then 16,850.
Any decline through 16,425 targets 16,370.