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.

Levels to watch: FTSE 100, DAX and Dow

The FTSE 100 is the big underperformer, with a sharp rise in the pound hurting the index. Meanwhile, gains for the DAX and Dow seem likely, despite the bearish wedge forming in the latter.

FTSE 100 falls back into the 76.4% Fibonacci retracement

The FTSE 100 managed to continue the creation of intraday lower highs and lower lows, with the index heading sharply lower in response to a bullish break for sterling.

Whether or not we hold up here will certainly be of interest, with a break below this Fibonacci level pointing towards a likely move into the 7064 swing low, where a break below that level would allude to a wider pullback coming into play. Thus, watch for a potential rally to continue this trend of lower highs and lower lows, with a break below Fibonacci and horizontal support proving key to maintaining the downward trajectory.

DAX turning higher from Fibonacci support

The DAX is clearly outperforming the FTSE 100, with the market looking set for another push higher after an overnight retracement into the 76.4% Fibonacci level (11,426).

Interestingly, what provides us with greater confidence of an upward move from here is that we would need a break below 11,389 to negate the bullish outlook. That level represents the major peak from 5 February. Thus, unless that level is broken, a bullish short-term outlook remains in play.

Dow starts to gain ground from trendline support

The Dow Jones has pulled back into trendline support overnight, with the index trading within a bearish rising wedge formation.

The fact is that while we are trading within a bearish pattern, we are yet to see something that tells us a breakdown is impending. Thus, another leg higher looks likely for now, with a break below 25,763 required to negate the uptrend in play since December.

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.

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