CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

FTSE 100, DAX and Dow slump into critical support levels

FTSE 100, DAX and Dow are on the slide, yet key hurdles remain if we are to call the beginning of another wider market sell-off.

FTSE 100 continues its decline from Fibonacci resistance

The FTSE 100 has been on the slide this week, following a rally into the 61.8% Fibonacci resistance level at 6003. There is no doubt that we could be in a position where this index could be forming a major top, yet that wider bearish signal only comes with a break below the 5666 level.

Until then, it is a case of following the short-term downtrend until that has been debunked. As such, a bearish short-term picture is in place until we break through the prior swing high (currently 5879). To the downside, the next notable support levels come at 5799 and 5748.

DAX drops into critical support level

The DAX appears to be ahead of the FTSE 100 in its decline, with the pair breaking trendline support to trade within touching distance of the critical 10,369 low from early May.

A break below that point would signal a high likelihood that we have seen this market top out. Nevertheless, with the stochastic looking to have potentially bottomed out, a break through the 20 level could bring a bullish swing in momentum. Ultimately, the outlook for the DAX will be determined by the ability or inability to break through the 10,369 low.

Dow Jones declines take index back to key support

The Dow has similarly declined into a critical area of support, with the ability to remain above the 21 April low of 22,940 key for bulls. A break below the point would bring the lowest level in over a month and potential herald another strong move lower almost two months after the mid-March bottom.

Much like the DAX, the stochastic is crossing over within oversold territory. That may not provide a bullish signal, with a rise through the 20 mark required for such a sign. Looking at the past three occasions of such a break back up through the 20-mark, they have providing strong buying opportunities for the index. As such, we await a break through 22,940 (bearish) or through 20 on the stochastic (bullish) to guide our next move.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.