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Levels to watch: FTSE, DAX and Dow

European markets recover from significant losses, while Dow Jones continues to push on into new territory.

Source: Bloomberg

FTSE breaking higher once more

It seems the FTSE weakness could be somewhat short lived, with the index breaking higher once more this morning, thanks to a weaker pound. So far, the price has rallied into the 7310 resistance, and a break above that level would point towards a push through 7323 before long.

As such, the signs are there that we are likely to resume the uptrend. We would need price to break back below 7251 to become less bullish. Until then, buying retracements seems sensible. 

DAX breaks higher to negate signs of weakness

The DAX has broken higher through the 11,861 resistance level, subsequently sparking a sharp resurgence for the index. Given that we are now creating higher highs and higher lows, the index is looking increasingly bullish, with traders likely to buy on dips.

A break through 12,032 would provide a significantly more bullish view. Conversely, a break back below 11,780 would provide a more bearish signal.

Dow continues to push higher

Dow Jones managed to create new all-time highs yesterday, following a break through 20,845. Crucially this highlighted that, despite a triangle in play, the key event required for a more bearish picture was a break below 20,769, which did not occur.

With the price having pulled back towards the 20,845 area, we are now pushing higher, with a bullish outlook remaining in play as long as we remain above 20,837.  

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