FTSE 100, DAX and S&P 500 all rally in early trading amid US-China trade truce
A trade truce between the US and China has provided the spark for an equity rally, with the DAX at a one-year high, the FTSE 100 retaking its June high and the S&P 500 back to a record once again.
FTSE 100 clears mid-June peak
Today’s gap higher has seen the FTSE 100’s mid-June gains that stalled around the 7450 level taken out.
Now the index targets 7530, the late April high, and then beyond this, 7556 and 7644 come into view. A drop back to fill the opening gap could find buyers, but any pullback will need to break 7370, key support over the past week, to suggest that a deeper drop is at hand.
DAX leaps above resistance
An opening gap higher has been followed up with further gains, with the DAX briefly touching a one-year high.
If it leapfrogs 12,400 and 12,600, then the next to watch is 12,954. Such a dramatic move higher might reverse in the short term, but a drop towards 12,250 would represent a strong buying opportunity. The index would need to fall below 12,160 to suggest that a bearish view was gaining pre-eminence.
S&P 500 back to record high
A fresh record high for the S&P 500 comes just days before Independence Day.
Those calling for a ‘triple top’ have flagged, somewhat rightly, that the index has failed to clear the 2940-2960 area since September last year. But further gains will lay this bearish thesis to rest. A pullback towards 2940 could find fresh buyers, while the bearish view requires a move back below 2900.
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