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Levels to watch: FTSE 100, DAX and Dow

Indices enjoy a welcome break to recent selling. However, will we see another move lower in the near future?

FTSE 100 rallies towards 76.4% retracement

The FTSE 100 failed to break lower yesterday, with the key 6955 level remaining untouched, despite selling throughout the morning. The wider downtrend in place over the past month points towards the potential for another move lower, with the 76.4% Fibonacci of particular interest.

A break above 7256 would signal the return of the bullish longer-term outlook. However, until that happens, there is a chance we will begin to turn lower once more before long. A break below 6972 in particular would signal the beginning of the next downside move.

DAX rallies towards key resistance zone

The DAX has managed to rally back up through the 61.8% Fibonacci level, with yesterday’s drop being overcome in incredible fashion.

There is still a good chance we are seeing another wider retracement, with the 12,477 level needing to be broken to bring back the wider bullish outlook. With that in mind, watch out for the descending trendline and 61.8% confluence as potential resistance in the near term.

Dow rallies through wedge top

The Dow Jones has broken through the top end of a falling wedge formation, with the price trading currently around Fibonacci and horizontal resistance at 24,414.

There is a chance of the index retracing lower from here, given the previous resistance found at this level. However, watch for a potential extension to this wedge breakout, with the 76.4% coming into play around 24,635.

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