FTSE, DAX and Dow push higher ahead of latest US jobs report
The FTSE, DAX, and Dow have been on the rise, but could the current bearish trends signal a possible impending sell-off for European indices?
FTSE 100 rebounds, with Fibonacci resistance coming into play
The FTSE 100 has been on the rise over much of the second half of the week, with Boris Johnson’s resignation doing little to dampen sentiment around the pound and UK-listed stocks.
However, despite the gains seen over the course of the past three days, questions do still remain given the recent trend of lower highs. This rebound has taken price back into the deep Fibonacci zone between the 61.8% and 76.4% retracement levels.
With that in mind, there is a good chance we see a bearish turn to continue the downward trajectory evident over recent weeks.
A push through the 7289 swing-high would be required to bring about a more positive outlook and signal the potential for a push towards 7400-7500.
DAX on the rise, but bearish trend brings risk of a bearish turn
The DAX has similarly enjoyed a welcome boost in recent days, with some pointing towards the Chinese consideration of a $220 billion stimulus plan as grounds for optimism in Germany.
The upside evident this week does come off the back of a rebound from the March low of 12432. However, until we see price push up through the 12965 level, there is a distinct risk that the bears will come back into the fray.
A look at the stochastic oscillator, we have seen a move up through the 80 threshold. Previous reversals back out of overbought territory in the past month has subsequently brought about a downside reversal.
As such, a bearish trend remains in play until we see price break back through the 12965 level.
Dow continues to grind higher
The Dow has managed to build bullish momentum over the course of the week thus far, helping to extend the now three-week period of respite from major selling pressure.
Today provides a fresh hurdle for markets, with the latest jobs report released at 1.30pm (BST). With many expecting to see inflation and higher rates bringing negative impacts upon the economic outlook, there is a good chance people will approach any jobs data with a glass half empty perspective.
Nonetheless, things look relatively positive following the push through 31324. In fact, price has found support on that same level as it attempts to bring a fresh upward move.
A break back below the 30356 level would be required to bring about a more reliable bearish signal. To the upside, keep an eye out for trendline and horizontal resistance (31885).
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