CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE 100, DAX and Dow

Markets have staged a short-term recovery. However, with a downtrend in play, it looks likely we will see the sellers come in once again.

IG Analyst

Publication date : 2018-10-29T09:17:55+0000

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FTSE 100 rebound takes us into key resistance

The FTSE 100 has rallied into a confluence of resistance, with the 76.4% retracement and descending trendline both coming into play.

This suggests a potential bearish reversal from here, with a rally through 7027 pointing towards a wider retracement of the sell-off from 7115. As such, there is a good chance that we are looking at a retracement here, with a break above 7115 needed to bring about a more confident bullish outlook.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX attempting to regain ground after recent sell-off

The DAX has been pushing higher, following on from an inability to create a new low on Friday.

The subsequent rally has taken us into the 76.4% retracement, with the price now starting to turn lower. Should we see a break through the 11,372 swing high, it would point towards a potential wider retracement of the sell-off from 11,851. However, until then it looks likely that we will turn lower from this Fibonacci resistance.

DAX chart

DAX chart

DAX chart

Dow drifting lower after recent rebound

The Dow Jones also managed to start regaining ground on Friday, with the price hitting trendline and Fibonacci (61.8%) resistance.

This points towards a likely move lower from here, with a break through 25,105 required to bring about expectations of a wider retracement of the 25,862 sell-off.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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