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Levels to watch: FTSE, DAX and Dow

Both European and US markets continue to move lower, but could this provide us with a better buying opportunity?

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.
German stock exchange
Source: Bloomberg

FTSE uptrend coming back into play

The FTSE is showing signs of resurgence this morning, with the price breaking above the 7365 level following a failure to break below the 7338 low (and 38.2% retracement).

This points toward the potential for this current move lower to provide a buying opportunity for the index. Thus, look out for a move into the 7346-7348 (70%-76.4%) support zone as a potential area for longs. 

DAX at key support convergence

The DAX has been consolidating over the past 24 hours, with the price selling off into a key support zone this morning. The confluence of the 200-hour simple moving average, alongside a 50% retracement and ascending trendline points toward the potential for a bounce here.

Certainly, a break back below 11,919 would point to the potential for further losses. However, this could be an interesting area for the index to turn higher, with 12,203 and 12,057 the key resistance levels ahead.

Dow downside provides buying opportunity

Dow Jones has similarly consolidated overnight, with the index retracing a significant portion of last week’s rally.

Crucially, we could see another leg lower, which would simply serve to provide a better area to get long, with the 20,869-20,894 area of particular interest. But as long as we do not break back below 20,775, another break higher seems to be the likeliest outcome.

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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.