Levels to watch: FTSE, DAX and Dow

The European indices seem to be leading the way, with the Dow Jones pulling further away from the 20,000 mark. Will this divergence continue?

Data screen
Source: Bloomberg

FTSE continues to lead the way

The FTSE 100 has been outperforming its US and European counterparts over recent days, with the index pushing higher despite uncertainty elsewhere. That continues to be the case, with a break through 7064 this morning proving the uptrend remains intact.

While further gains are expected, it is worthwhile noting the 7068 level represents a significant resistance level (25 October swing high). With that in mind, a bullish outlook remains, yet it may make sense to await a break and close above 7068 to provide confidence that a pullback isn’t about to occur.

DAX pushing higher from key support

The DAX has managed to move higher from the key 11,434 support level following a pullback on Wednesday. That 11,434 level represents a major historical swing high and as such, the ability to remain above it is crucial to the bullish sentiment remaining relevant.

With that in mind, a bullish outlook is still in play, with an hourly close above 11,481 providing a signal that we are set for another leg higher for the index.

Dow weakness looks set to continue

The Dow Jones is continuing to look somewhat weak, with the creation of lower highs and lower lows seemingly set to continue. A break back above 19,955 would signal this short-term weakness is over. Until then, it looks like we could see another short-term move lower.

Yesterday bottomed out at the 76.4% retracement which was an interesting long opportunity. A return to that level could once more present an option to get long. As long as we do not break back below 19,852, then this weakness looks likely to be short-term rather than indicative of a wider bearish reversal.

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