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Levels to watch: FTSE 100, DAX and Dow

European and US markets are showing signs of a potential pullback. However, with uptrends in play, there is a chance such a move will be short-term.

FTSE 100 rally starts to falter

The FTSE 100 rally seen throughout the past two days is starting to come under pressure, with the creation of a bearish engulfing pattern pointing towards a potential turn downwards from here.

Coming off the back of a trendline breakdown and drop below 7179, this recent bounce looks like a 76.4% retracement before we turn lower once more. Unless we see a break through the 7262 peak from Friday, this market looks at risk of another move to the downside. This far we have seen the 50% Fibonacci level respected, yet this could become a deeper retracement unless we do break that 7262 level.

DAX turning lower from trendline resistance

The DAX is also breaking lower, following on from a period of upside over the course of the past 24 hours.

There is a good chance that this could be the beginning of a short-term retracement of the rally from 11,242. Keep an eye out for short-term downside, with a drop below 11,242 required to bring about a wider bearish picture.

Dow falling back from key resistance

The Dow Jones is weakening off the back of a rally into a three-month high this morning.

That fleeting move through the 26,071 level overnight has still seen the price respect a level that is crucial to the wider story for this index. While the short-term trend remains bullish, this certainly represents a key level that could see a wider pullback come into play. Keep an eye out for a break below 25,790 to signal a wider bearish phase coming into play, whereas a rally back up through 26,071 would point towards a likely continuation of this recent uptrend. Should the index break through the 26,072 level, the next resistance level of note is found at the November peak of 26,278.

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