Levels to watch: FTSE, DAX and Dow

Recent weakness for stocks appears to be waning, with the FTSE and Dow in particular showing signs of strength.

Data board
Source: Bloomberg

FTSE 100 hits another Fibonacci on its grind higher

The FTSE has been pushing higher from the 76.4% (7171) Fibonacci retracement this week, with price pulling back once more to hit another 76.4% (7174) this morning. The fact we did not break below 7160 points toward a likely move back into the previous highs of 7205.

As such, a bullish outlook is in place, with a move back above 7200 and 7205 likely to be around the corner. A break below 7166 would serve as a warning sign that we could see some short-term weakness for the index.

DAX attempting to regain ground

The DAX has seen sharp losses this morning, with the current candle showing an attempt to regain some of that ground. Until we see a break back above 11,597, the downtrend remains intact.

That said, the resolution to this current pattern is expected to be bullish with a move back towards 11,646 likely rather than a break below 11,401. This would be required to negate the wider bullish trend. 

Dow pullback unlikely to last

The Dow Jones has managed to break through 19,938 resistance overnight, bringing a bullish outlook to proceedings. With price forming an ascending channel this morning, we are likely to resolve to the upside.

As such, a bullish signal comes from either a break through 19,934 or else a pullback to the 19,891-19,903 zone. A move back below 19,872 would negate this short-term view.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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