to test 6820
Yesterday the FTSE moved closer to 6900, but for the moment it has yet to break this level. It looks increasingly likely that the index will test the rising trend from December, around 6820, with further support possible at 6700 should the bulls fail to mount a spirited defence further up.
For the moment rallies have been constrained by the 50-hour simple moving average (SMA), which currently sits around 6964. A move back above 7000 would signal that the bulls are back in control, although they still need to move through 7100 to kick-start a fresh rally.
DAX rally waits a little longer
The DAX remains stuck at the bottom end of its descending channel, with no sign yet that a bounce is in place. With the underlying market closed for the day we can safely say any rally will be deferred to next week. However, the outlook remains the same even with a short-term bounce, with the 11,000 level still looking very inviting.
Dow Jones to test 50-day SMA
As was the case on 17 April, a dip through the 100-day SMA (17,838) brought out the buyers, but the Dow Jones must now break above the 50-day SMA (17,967) to confirm that the bulls are back in charge. A failure to hold 17,800 would suggest we will see another test of 17,470, the 200-day SMA. US markets have not displayed the same keenness to move lower as eurozone markets have shown, but they may follow suit should we see a resurgence of dollar strength.