Levels to watch: FTSE, DAX and Dow

The indices are on the charge higher, with the Dow hitting new highs and the FTSE rallying heavily. Could this move continue apace?

US traders
Source: Bloomberg

FTSE punching higher once more

The FTSE is pushing in towards the 76.4% retracement this morning, with the index continuing its recovery following a drop into the 7356 support level on Monday.

The reaction to the 76.4% is going to be key here, with a confident break through it pointing towards a continued resurgence through 7516. However, given the recent flatlining lows, there is also a potential for a more bearish picture to come into play should that Fibonacci resistance be respected. 

DAX rallies into key resistance

The DAX is rallying within a rising wedge pattern. The push higher within this bearish pattern points towards a potential weakening in the near future, with the 12,310 level the prime candidate for such a move to come into play.

Given the wider uptrend in play and recent 76.4% respect, there is a good chance that any such weakness could be fleeting. Keep an eye on how the market responds to the 12,310 level, with a break through pointing towards further gains as we approach the wedge apex.

Dow likely to push higher once more

The Dow Jones managed to push higher to new all-time highs yesterday, following a retracement into the 76.4% Fibonacci level. We are now seeing a rally out of a symmetrical triangle, with an hourly close above 21,627 providing confirmation of a likely charge onwards towards the previous highs once more.

A break back below 21,598 would negate this short-term bullish outlook.

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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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