Positive start to the week renews hope for the bulls

<p>Last week’s mixed trading session created an uncertainty pattern across several stock indices. However the start to this week’s trading has lifted the markets higher, […]</p>

Last week’s mixed trading session created an uncertainty pattern across several stock indices. However the start to this week’s trading has lifted the markets higher, with the markets likely to succeed in breaking above the highs to set the stage to challenge upper resistance levels.

With the FTSE 100 already in positive territory the index looks in good shape to aim for the 5600 target. With clearance of the much awaited 5445 level the FTSE will need to remain above short term pivots at 5360. Currently the index is above its 20-period Moving Average and momentum indicators are also in positive mode. This indicates that as long as sentiment remains bullish there should be hope for higher prices this week.

On the US side the Dow Jones finished last week nicely, clearing strongly past 11472 and almost reaching the 11850 target. It appears as if this target will be reached early this week, setting sights on the 12000 level if momentum can be sustained. Short term the index will need to maintain its stance above 11380 to continue higher.

In currencies, the EUR/JPY pair saw very choppy trading through last week and may follow through in today’s trading session. For a move to the upside the pair will need to clear 106.46 to follow through in reaching 107.15 but as a weaker opening has taken over, the EUR/JPY pair is currently looking for support at 105.40 which must hold. Otherwise a trade lower towards 104.90 may take place.

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