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Levels to watch: FTSE 100, DAX and Dow

Global indices have been drifting lower after yesterday’s hawkish Fed meeting. However, with recent trends remaining intact, this could be a good time to look for a bounce in European and US markets.

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.
Wall Street
Source: Bloomberg

FTSE 100 falls back into trendline support

The FTSE 100 has dropped into trendline support overnight, following a hawkish meeting from the Federal Open Market Committee (FOMC). Today sees the emphasis shift onto the European Central Bank (ECB), where we could see a similarly hawkish shift towards ending quantitative easing (QE).

For now, the FTSE 100 remains within a trend of higher lows and flatlining highs. As such, a bullish outlook is in play following the fall into a deep retracement. The current candle is highlighting the respect of that trendline which dates back to November 2016. A bullish view is in play for a move back into the 7761-7772 region. A break below 7638 would negate this.

DAX retracement likely to be short-lived

The DAX has similarly seen downside overnight, bringing the index close to yesterday’s 12,779 low.

A break below that level would simply look like a retracement of the 12,611-12,956 rally, at which point we will utilize the Fibonacci levels for a bullish entry. Until then, the ability to remain above 12,779 should signal whether we are set for a push higher or drift lower in the short term.

Dow drops below Fibonacci support

The Dow Jones has managed to break lower following a slow in the recent uptrend, as signified by the break through trendline support.

The price has since broken below the 76.4% retracement, highlighting the potential for a further breakdown. Nevertheless, there is still a strong chance that we will see this uptrend come back on track with a rally from here. A break below 25,075 would provide that bearish signal, and until that happens a rebound seems likely. 

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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.