Levels to watch: FTSE 100 and Dow
Another overnight session full of volatility has seen the Dow push higher yet. With both European and US markets pausing, will we see another strong move higher from here?
FTSE rebounds from major support zone
The FTSE 100 failed to break into a new low yesterday, with the substantial sell-off providing a marginally higher low. A break below that previous low of 6515 would have provided a signal that the 61.8% retracement seen earlier in the week is the limit of the upside potential.
However, given the upside we have seen since, it makes sense to await a resolution from this current pause. Should we rally up through the 6679 level, then it would make sense to start looking for further upside, with a possible ultimate rally into the 76.4% resistance level at 6817. However, until then there is also a chance the downtrend will kick in again, and a break below 6515 would signal that.
Dow trading above key resistance level
The Dow Jones has enjoyed a more clear-cut period of strength, with the downside seen through much of Thursday giving way to another leg higher through the evening.
With the index having moved through the 23,112 resistance level, there is a good chance that we will see another bullish surge if the price doesn’t fall back below the 23,000 mark. If it does, then we would be looking at another retracement coming into play. Either way, if the index doesn’t break below 22,264 then further upside looks likely before long.
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