Levels to watch: FTSE 100, DAX and Dow Jones
Global indices are declining, with both European and US markets showing signs of a potential near-term market top.
FTSE 100 breaks critical support level
The FTSE 100 has dropped below the crucial 7064 support level this morning, with the index hitting the lowest level in over three weeks.
This points towards a bearish phase coming into play from here, with a retracement of the rally from 6732 looking likely. As such, a bearish outlook is in play, with a break through the 7111 level required to negate the short-term bearish view.
DAX showing signs of bearish breakdown
The DAX has broken thorough trendline support this morning, bringing about a new lower low in the process. This points towards a likely bearish shift for the index, with a drop below 11,389 likely to prove key in confirming a bearish outlook for the near term.
With the price currently rallying, there is a chance we could see a short-term rebound, yet unless we break through the 11,522 level, such a move would represent a selling opportunity.
Dow pullback brings us closer to notable breakdown level
The Dow Jones has continued to weaken as the week progresses, with the price falling into the 25,871 support this morning. The wider trend is clearly bullish for this market, and thus there is a good chance we could see the bulls come back into play if the price rallies through the 26,037 level.
However, to the downside we are awaiting a break below 25,763 to signal the beginning of a wider bearish phase for the index.
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