FTSE 100, DAX and Dow weakness unlikely to last
FTSE 100, DAX and Dow weaken, but could this period of weakness provide us with a good buying opportunity?
FTSE 100 on the slide once more
The FTSE 100 is on the back foot once again this morning, with yesterday’s bearish price action continuing into today’s session. The recent rebound from the bottom of a standard deviation channel does highlight the likely upward trajectory to come, with this current pullback best viewed within that context. As such, the current pullback looks like a potential buying opportunity, with the 61.8% and 76.4% Fibonacci levels (6931-6890) providing a key reversal zone that looks attractive for longs. A break below 6822 would be required to see us exit from this wider channel to bring a more bearish view.
DAX pullback unlikely to last
The DAX has similarly been weakening in early trade today, with the index continuing the pullback established yesterday. The recent recovery from the 61.8% support level at 14838 brought price into a fleeting record high yesterday. Thus, while we are seeing the index decline here, there is a good chance that this will ultimately resolve with another move higher before long. Watch out for Fibonacci support at 14986 and 15093 as a potential area where the bulls could come back into play. Ultimately there is a good chance this current pullback creates a higher low, with a decline below 14814 pointing towards a potential wider move towards the 14679 level. Until that break occurs, this current decline looks like a potential buying opportunity.
Dow Jones recovery falters, but bulls likely to return
The Dow has been attempting to regain ground following a decline below 33689 support last week. However, with a wider uptrend having consistently played out of the past year, there is a good chance that we will soon resolve to the upside once again. With that in mind, watch for an upward break in the stochastic, with a push up through the 20-threshold bringing a good sign that momentum is shifting in favour of the bulls. From a Fibonacci perspective, the 33570-33746 zone looks interesting as one in which the bulls could come back into play.
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