CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Levels to watch: FTSE 100, DAX and Dow

Consolidation is the name of the game, with bullish outlooks in play across European and US markets despite sideways or downside price action so far this week.

IG Analyst

Publication date : 2017-08-08T09:13:51+0100

Trader figure

Source: Bloomberg

The FTSE 100 continues to consolidate at key support

The FTSE 100 remains above the 7516 support level this morning, continuing the consolidation seen so far this week. An hourly close below 7516 would point towards a retracement, with the 61.8% (7488) of particular note given the confluence with previous resistance.

In either case, an hourly close below 7457 would be required to negate the bullish outlook that comes following the rally through 7487 and 7516.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX downside unlikely to last

The DAX has pulled back following the rally through 12,305, with that break pointing towards a resurgence for the index. Given that bullish view, this current pullback looks like a short-term retracement before we break higher once more.

As such, look out for the Fibonacci retracements for potential bullish reversal areas. An hourly close below 12,098 would be required to negate the bullish view.

DAX chart

DAX chart

DAX chart

Dow back at key support area

The Dow Jones has moved into the 50-hour simple moving average (SMA) overnight, with the price reaching the apex of a symmetrical triangle formation.

We have a clear uptrend in play here and the SMA has been a reliable support level over recent trade. As such, further upside is expected, with a break below 22,062 required to bring a question mark over the current short-term uptrend.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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