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Levels to watch: FTSE 100, DAX and Dow

Gains in the second half of the week are making up for losses in the first. However, with the DAX and Dow both below crucial resistance levels, the potential of another bearish turn remains.

FTSE 100 rebounds from support zone

The FTSE 100 managed to continue its recent uptrend, with the rebound from the 7340 support level (late-February peak) negating the notion that we will see a short-term downside come into play just yet.

A weak pound has been helping this index push higher, and as long as we remain above 7334, further upside is likely and sell-offs are there to be bought into.

DAX rallies into major resistance zone

The DAX has managed to rebound following recent losses, with the index pushing back into the 12,611-12,649 resistance zone. That zone represents the late-February peak, coupled with the recent high established on Tuesday.

A break above that zone would negate the notion that we could see a more protracted pullback from here. However, until that occurs, there is still a chance that the recent drop below the 12,376 swing low is a precursor to a larger pullback into Fibonacci support at 12,177 or 12,065.

Dow rally may not signal the end of the sell-off yet

The Dow Jones has managed to recover much of the downside seen earlier in the week, with the price retracing back through the 61.8% Fibonacci level.

Until we see a break above the 24,636 level, there is still a good chance we will see another turn lower in a continuation of the downtrend in place over recent months. 

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