CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE 100, DAX and Dow

US markets continue to outperform, with the Dow hitting new highs yesterday. Meanwhile, both the FTSE 100 and DAX are consolidating within triangle formations.

IG Analyst

Publication date : 2017-10-25T09:08:22+0100

DAX traders

Source: Bloomberg

FTSE 100 consolidating once more

The FTSE 100 continues to consolidate, with the price currently in a symmetrical triangle formation via the creation of lower highs and higher lows. Ordinarily, that would mean we would be looking for a directional breakout via a move through 7499 or 7537.

However, because this current pattern is taking place within a period of sideways consolidation, there is a good chance we could simply continue to move sideways. Given the recent move below the 7515 support zone, a break lower would have greater implications than a break higher, which would simply point towards a move back into 7553 range resistance.

FTSE 100 chart

FTSE 100

FTSE 100 chart

DAX pushing higher from triangle bottom

The DAX continues to trade within a symmetrical triangle formation, with the price currently pushing sharply higher following a move back into trendline support. That brings about a strong likeliness of a rally into the descending trendline resistance up ahead.

Ultimately, we are looking for a breakout through either 13,056 or 12,970 to signal where to go next.

DAX chart

DAX chart

DAX chart

Dow continues to outperform

The Dow Jones remains in a clear uptrend, with yesterday seeing the price break higher from the 61.8% retracement. So far, we have not seen a deep pullback.

As such, it makes sense to await either a break through 23,485 or a deeper pullback for bulling entries. We would need to break below 23,264 to negate the current bullish outlook.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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