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Levels to watch: FTSE, DAX and Dow

A sharp sell-off for European and US indices is a reflection of risk-off sentiment permeating through financial markets this week. With key support levels in view, will this sell-off continue?

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
US trader
Source: Bloomberg

FTSE sell-off gathers pace

The FTSE has managed to break lower from not only its range, but also trendline support. It looks like we are seeing a retracement of the rally from the 6767 swing low, pointing towards a possible bounce from the 6852-6876 mark. We have seen no bullish reversal signs and thus for now there is a strong likeliness we will see further downside.

However, we would need to see a break below the 6767 level to negate the medium-term uptrend. As such, be aware we could see a bounce around the corner. 

DAX plummets past 76.4% retracement

This week has seen substantial selling pressure for the DAX, with price falling back below the 76.4% retracement. Much like the FTSE, we have a clear uptrend in play over the past month and we would need a break below 10,347 to negate that.

As such, it is worth noting the possibility of a bounce. However, much of that will be down to political considerations. 

Dow trading in crucial support zone

The Dow Jones has tumbled sharply into the 17,907-17,956 support zone, hitting a 50-day low in the process. The biggest level of note is at 17,907, where a break below could spark a substantial sell-off.

However for now it is worth noting price could find a bounce given the importance of this support zone. The short-term downtrend is clearly defined, yet it makes more sense to either await a bullish intraday reversal sign or a closed hourly candle below 17,907 for the next move. 

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.