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Indices at risk of another breakdown

Indices look set for a bearish shift, with recent gains turning into losses after the long weekend.

FTSE 100 rebound looks set to reverse as sellers kick in

The FTSE 100 has been gaining ground since Thursday’s low, with the index rallying into Fibonacci resistance at 7311. As the price is currently turning lower, we are seeing a drop back into the key support level of 7281. That points towards the bearish view coming back into play.

With the recent rally having come off the back of a double top breakdown, there is a chance we could see the sellers gain dominance once more from here. As such, watch for an hourly close below 7281 to provide a bearish signal for the week ahead.

DAX turning lower from moving average resistance

The DAX is also turning lower, following a rally into trendline and moving average (200) resistance. The creation of lower highs has been consistent throughout the course of the month, and with the price showing signs of weakness, there is a good chance we could see the sellers come back in today.

The failure to rise through 12,214 certainly alludes to that possibility, and thus while the price remains below that resistance point, we are looking to see if the selling can take hold. A beak below 11,991 would provide confirmation of that bearish picture.

Dow starts to turn lower recent gains

The Dow Jones has been slowing in its ascent, with the market finally starting to reverse into a potential bearish move. With the price breaking through trendline support from the 61.8% Fibonacci region, there is a good chance that we could see the sellers come back into play once more.

The trend has been a bearish one over the course of May thus far, and this current move looks likely to drive the index lower as we close out the month. A rise above 25,704 would signal a potential continuation of this recent rebound, yet until that happens it looks like we are setting up for a bearish phase for the Dow.

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