Levels to watch: FTSE 100, DAX and Dow

Global markets are on the slide, with the Fed’s rate rise driving stocks lower. With the Dow reaching a critical support level, further downside could spark another protracted period of weakness.

Trader Source: Bloomberg

FTSE 100 halts decline after hitting two-year low

The FTSE 100 fell below 6670 in the early hours of the morning, with the index reaching a new two-year low. This continues the bearish trend for the index, pointing towards further downside.

However, with the index starting to regain ground off the back of a long-legged doji, there is a good chance we are set for an upward retracement. That being said, such a move would be perceived as a temporary rebound which is there to be sold into unless we break above 6792.

FTSE 100 chart

FTSE 100 chart

DAX returns to key support level

The DAX has also turned lower, with the continued creation of lower highs and lower lows taking us back into the crucial 10,588 swing low.

A break below that level will set us on the next leg lower, with the downtrend looking likely to remain intact. As such, watch for the reaction at this key support level to guide the price action for the day.

DAX chart

DAX chart

Dow temporarily break critical support level

The Dow Jones has fleetingly moved below the critical 23,112 support level, with the Federal Reserve’s (Fed’s) dovish hike doing little to help stocks.

Should the index manage to sustain the price action below that 23,112 level, we could be set for a protracted period of downside. Thus it makes sense to expect some form of rebound from here. Whether that happens or not remains to be seen, yet it makes sense to only look for short positions if we convincingly break below 23,112.

Dow Jones chart

Dow Jones chart


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European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 25 July 2019.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

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