FTSE, DAX and Nasdaq on the rise, as the recovery phase looks to continue
The FTSE, DAX, and Nasdaq turn upwards once more, bringing expectations of further strength.
FTSE 100 surges higher towards resistance
The FTSE 100 managed to push sharply higher once again yesterday, with the index rising into a fresh two-month high.
Set within a wider trend of lower highs, this rebound looks likely to represent a retracement before we head lower once again. However, the higher we get, the more likely we are to see a bullish breakout through the 7577 swing-high.
Nonetheless, for now we are looking for a potential reaction from the descending trendline (provisional) drawn from the June and August peaks.
Given the risk that this current rise continues, another method to lessen the risk involved in looking for short positions here would be to wait for a breakdown through 7292 as signal that the short-term pattern of higher lows has broken down.
Until that happens, there is still clearly strong upside momentum playing out here.
DAX reaches five-month high
The DAX has managed to push tentatively through the recent high of 14442, bringing about a fresh five-month high for the index.
Coming off the back of a period of consolidation below last Tuesday's high, the break through resistance does signal the potential for another bout of gains to build on the recent two months of gains.
Keep an eye out for German PMI data released at 08.30 as a source of volatility. However, for now, it looks likely that we will see further upside to follow through on this recent break.
A move back below the 14124 swing-low would be required to signal a potential downside move coming into play.
Nasdaq turns upwards to signal potential year-end rally
The Nasdaq has started to tentatively turn upwards once again, following a week of losses that took some of the heat off the index.
This index is likely to be the main casualty when market sentiment does take the turn once again, but it can also benefit the index with a substantial upside move when markets take a more constructive view.
For the DAX, any short-term gains do look to represent a retracement of the 13722-10432 until we see that 13722 level taken out. However, for the near-term, there is a distinct possibility that we see price rise into a deeper upward retracement.
A push through the 11808 level would bring a signal that we are set for another upward phase here.
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