Levels to watch: FTSE 100, DAX and S&P 500
While US markets have managed to break higher, the same cannot be said for Europe.
FTSE 100 trying to hold gains
While still in an upward channel, the FTSE 100 is starting to struggle below 6900.
Trendline support around 6875 is the first area to watch, followed by 6840, the lows of Monday. Following on from this would be 6776 support, but below 6800 the index starts to look increasingly bearish. A recovery above 6950 puts the upper half of the channel in play, towards 7000 and higher.
DAX stuck below 10,900
DAX's gains above 10,900 have proven impossible to sustain over the past few sessions, while intraday sell-offs have found support at 10,800. A break of this range indicates the next direction, with trendline support around 10,700 coming into play.
Above 10,900, the index will push on above 11,000 but needs to clear the area around 11,020 to maintain upward momentum.
S&P 500 breaches resistance
The 2600 area acted as a barrier to progress over the past few sessions, but the S&P 500 appears to have broken to the upside, and dips continue to be bought.
The zone around 2630 is the next area to watch, marking the lows of October and November before the December sell-off. A drop below the 2560 level would be needed to put a more bearish outlook on the index.
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