Levels to watch: FTSE 100, DAX and Dow

A rebound for European and US stock markets has brought relief within a recent downtrend. However, with the DAX and Dow downtrends remaining intact, the sell-off may not be over yet.

FTSE 100 rises through resistance

FTSE 100 has been gaining ground this week, with the index passing through a crucial resistance point to bring about a more bullish outlook going forward. The rise through 7286 signals an end to the trend of lower highs that has been in play over the course of the past three weeks, raising the likeliness of a long-lasting recovery for the index.

With that in mind, further gains remain a distinct possibility, with a drop below 7222 required to negate this short-term ascendance. However, it is worth noting that the decline of the pound has been a key driver of the FTSE 100 outperformance, with the bearish picture for the DAX and Dow Jones highlighting that we are not out of the woods yet for the overall stock market outlook.

FTSE 100 chart

FTSE 100 chart

DAX rebounds into 76.4% resistance

DAX has also gained ground following a rally from key swing low support at 11,824. The trend of lower highs remains in tact for now, with the price having moved into the 76.4% Fibonacci resistance level at 12,118.

A break through the 12,212 swing high would negate the bearish trend and it is worthwhile looking out for whether we reverse lower or push through this resistance point as a determinant of forthcoming price action. Given the bearish shift in momentum as seen through the stochastic oscillator, it makes sense to watch out for downside for the near term.

DAX chart

DAX chart

Dow turning lower from 61.8% retracement

Dow Jones is another market which has been showing weakness at a key resistance level, with the index turning lower from the 61.8% Fibonacci level overnight.

The wider bearish trend remains intact for now, with a break through 26,019 required to bring about a more bullish view. For the short term, further downside looks likely with the oversold stochastic highlighting the potential for a bearish turn from here.

Dow Jones chart

Dow Jones chart


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.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

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.

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.