Levels to watch: FTSE, DAX and Dow

Indecision dominates ahead of the Greek referendum, however signs point towards another leg of the recovery in global indices following Monday’s gap lower.

Data on screen
Source: Bloomberg

FTSE pullback could have short lifespan with Fibonacci support in view

Yesterday saw the FTSE 100 post a new intraday higher high, bringing with it a likely pullback. The initial retracement seen earlier in the week bounced from the 50% retracement and I am hoping for the same to happen today. As such, I am bullish while the price remains above the 50% (6609) and 61.8% (6600) retracements.

Given that there is the potential for big volatility, owing to the UK services PMI and possible Greek headlines, be prepared for potential volatility in the European session.

Fundamentally-driven price action creates choppy DAX market

The DAX has been very difficult to predict recently, with constant news stories associated with the Greek crisis coming out ad hoc. This morning has seen it take a bit of a turn for the worse with a move below near-term support 11,070 to create a near-term lower low to accompany the lower high yesterday. However, the choppiness of the market recently means that this holds less intrinsic value as it normally would.

As such, simply due to the fact that we are in a recovery mode following a bounce higher from the 38.2% retracement support (10,856), I am bullish, but in all honesty the volatility and unpredictability of this market makes it a difficult one to trade.

Dow bounces higher from support to bring bullish outlook

The Dow Jones is a lot clearer than the DAX, with a new high yesterday followed by a pullback to the 17,686 support level. Given the clear bounce higher from that level, I am bullish and believe we will see another higher posted in the near future.

Thus, I am bullish while price remains above 17,686 for a move back towards 17,830. Given that the US markets are closed today, be prepared for a quieter US session.

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