Levels to watch: FTSE 100, DAX and Dow

Italian political instability is driving stocks lower, with European indices in particular suffering. Meanwhile, the Dow is trading back at a critical support level.

FTSE 100 continues to extend recent bearish break

The FTSE 100 remains on a downward path, following the recent break below trendline and horizontal support.

We have seen the price move below the short-term intraday support this morning, raising the chance that we could see the selling gather pace. As such, a bearish outlook remains in play unless we push through 7761.

DAX falls into SMA support

The DAX has dropped into a new three-week low this morning, following on from losses brought about yesterday.

With the price currently trading at the 200 simple moving average (SMA), there is a chance of some kind of rebound from here. However, with the price having broken below the 12,799 mark, there is a good chance that any such rebound would be a short-term phenomenon before we see the index turn lower once more. As such, a bearish outlook is in play unless we break above 13,038.

Dow moves back into crucial support level

The Dow Jones has sold into the 24,629 support level once again, marking the fifth time since breaking through that level less than three weeks ago.

Just like the previous four times, this is going to be a crucial hurdle to overcome, with a strong likeliness of a bullish bounce. However, should we finally see a break and close below 24,629 it would bring about a heightened chance of a strong move lower, with the 61.8% Fibonacci retracement some 500 points from the breakout point. In any case, the directional bias will be dictated by the ability or inability to break that critical 24,629 support level. 

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.

Find articles by writer

All trading involves risk and losses can exceed deposits. Trading CFDs may not be suitable for everyone so please ensure that you fully understand the risks involved. All trading involves risk and losses can exceed deposits.