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Levels to watch: FTSE, DAX and S&P 500

Bullish momentum recovered last night, but caution prevails ahead of non-farm payrolls today. 

Source: Bloomberg

FTSE 100 still weak

FTSE rallies over the past week have been firmly sold, with the opening push higher this morning also defeated. A downtrend line has been scrupulously observed since 2 March on the hourly chart, and if the price moves back below that line it would be a notable sign of weakness.

A first downside target would be 7260, the lows of yesterday and key support from early February. Any rally needs to clear 7360 to then push back towards 7400.

DAX gains after ECB meeting  

European markets received a fillip from the European Central Bank yesterday, but on the DAX gains are petering out around 12,020. A push higher from here would head back to the 12,080-12,100 area.

A drop back needs to break 11,920, and if this develops then we could see a sudden push downwards to the 50-day simple moving average (SMA) at 11,739, and then down to 11,420 in the case of a much bigger unwind. 

S&P 500 stuck for now

US markets clambered off the lows of the session, with the S&P 500 bouncing off the first weekly support pivot at 2359. The price has pushed back to the 200-hour SMA (2373), but the 2370-2380 area has been where gains have stalled over the past week.

A move to 2385 would signal renewed bullish momentum and help clear the way for a push to 2400. If bears can get the price back below 2359, then 2337 and 2312 (the 50-day SMA) become the next targets to watch.

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