FTSE 100, DAX and Dow regain ground after recent declines
Indices have been regaining ground, with the FTSE 100, DAX and Dow all breaking key resistance. However, could we see short-term selling take hold after recent upside?
FTSE 100 rallies into key resistance to negate downtrend
The FTSE 100 has managed to rally into the key 7237 resistance level this week, breaking out from the trend of lower highs that have been in place throughout the past fortnight. That move points towards a heightened possibility that we could have further upside to come going forward.
However, with that break accomplished, there is also a chance we will see a short-term retracement before the pair starts to head higher once more. Watch for a move below 80 on the stochastic to raise expectations of such a pullback. However, unless such a move breaks 7079, it would look like a retracement and precursor to further upside. The chance of a retracement would be negated with a rally through the 7242 level.
DAX hits trendline resistance after bullish break
The DAX managed to break through the 11,925 resistance level today, bringing about a heightened chance of further upside. The price moved into an inside trendline resistance and is starting to show signs of weakness this morning.
Similarly, if we see the stochastic move below 80, this would provide a short-term bearish signal. Alternately, a rise through the ascending trendline would signal a continuation of recent gains.
Dow trading at key resistance zone despite bullish break
The Dow Jones provided us with a bullish signal upon breaking through the 25,220 swing high this week. However, the wider trend appears to also be coming int play here, with ascending and descending trendlines being joined by the 76.4% retracement.
With that in mind, watch for whether we can break through this confluence of resistance as a guide on where we go from here. Once again, watch for a break below 80 on the stochastic to provide a short-term sell signal.
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