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 S&P 500

The selling may not be over yet, with the DAX and S&P 500 breaking below key support.

IG Analyst

Publication date : 2018-02-02T09:32:30+0000

DAX

Source: Bloomberg

FTSE 100 falls into 61.8% retracement

The FTSE 100 has continued its descent, with the index dropping into a wider 61.8% retracement around 7473. That level has been providing clear support overnight, and will dictate the state of play for today.

An hourly close below 7473 would point towards a possible move into 7401 (76.4%). Should we see any bounce from here, we would need to see the price move above 7563 to negate the current short-term downtrend.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX dropping below key support

The DAX has sold off sharply over the week, with the price falling below the 76.4% retracement overnight (12,945).

That points towards the possibility of further downside, where we would need to see an hourly close above 13,006 to break out of this bearish picture.

DAX price chart

DAX price chart

DAX price chart

S&P 500 continues to channel lower

The S&P 500 has continued its downturn, with the price channeling lower at a gradual pace. That points towards a possible rebound from trendline support in the near future.

However, unless we see a break above 2835, further downside looks likely from here. It is notable that price has been creating deep (>76.4%) retracements within this channel, and thus any bounce back into trendline resistance could provide a good short-term selling opportunity.

S&P 500 price chart

S&P 500 price chart

S&P 500 price 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.

Find articles by writer

CFDs are complex 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. Professional Clients can lose more than they deposit.

The value of shares and ETFs bought through an IG stock trading account can fall as well as rise, which could mean getting back less than you originally put in. Please ensure you fully understand the risks and take care to manage your exposure.

IG does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. IG is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.

IG is a trading name of IG Limited a company registered at 2702 & 2703 Level 27, Tower 2, Al Fattan Currency House, DIFC, Dubai, United Arab Emirates. IG is authorised and regulated by the Dubai Financial Services Authority (DFSA) under reference No. F001780.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UAE and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.