U.S. markets are closed today for Presidents’ Day so European markets are struggling for direction. With lighter trading volumes anticipated there are likely to be few trading triggers today. There are no high impacting economic data releases due, however traders will look cautiously at a speech by Bank of England (BOE) Governor Mark Carney about leadership and values especially given his hawkish tone at the BoE meeting last week.
In the daily timeframe, FTSE 100 has recovered from the lows of the sharp declines and is now testing the important 7300 zone. A break of the trend line from March above 7330 would put the bulls in control with initial resistance at 7355 and then the 61.8% retracement at 7460. However, if the trend line is confirmed as resistance then any downside move will find support at 7275, 7205 and then 7170.
German stocks were modestly higher on Monday as oil prices advanced and the EURUSD held steady above 1.24. The rally in the DAX index has stalled at 12550 and represents a retracement of less than 50% of the decline from the highs. A break of 12550 is needed for a continued bullish move with resistance at 12665 and 12742 before reaching the 61.8% retracement at 12870. Major trend line and horizontal resistance will be found near 13000. On the flip-side further declines would find support at 12200 and 12050.