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, DAX and Dow

The FTSE leads the way once more, helped by a weakening pound. How long will the recent UK-US divergence last?

IG Analyst

Publication date : 2017-01-16T09:21:58+0000

Traders in a German stock exchange

Source: Bloomberg

FTSE 100 pullbacks provide long opportunity

The FTSE has pushed higher once more, aided by the sterling weakness evident through the Asian session. We have seen the index pall back to the 76.4% retracement at the open, with price rallying since.

As long as we do not see the index drop back below 7308, a bullish outlook remains in place for the creation of new highs.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX heading towards range bottom

The DAX has taken a turn for the worst this morning, falling into the 11,523 support level in early trade. With the FTSE having bounced from the 76.4% retracement, there is a good chance we could see the DAX rallying from the range bottom.

That said, given the sell-off into 11,490 late last week, there is a possibility of a move below 11,523 to continue the creation of lower lows. The ability or inability to maintain price action above 11,523 will be key to determining the answer to that question.

DAX price chart

DAX price chart

DAX price chart

Dow weakening from Fibonacci resistance

The Dow Jones is testing a key support level after selling off from the 76.4% retracement on Friday. The 19,848 level is going to be crucial in determining whether we will see short-term losses today, with an hourly close below this level likely to spark further downside.

As such, the 19,848 level will be crucial to whether we see a bounce of not in the short term. There is a chance of a retracement higher, yet given the wider trend, it is likely to be a short-term affair. For the bullish outlook to come back into play, we would need to see a break through 19,953.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

This information has been prepared by IG, a trading name of IG Australia Pty 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.

Find articles by writer

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You do not own or have any interest in the underlying asset. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Please consider the Margin Trading Product Disclosure Statement (PDS), Risk Disclosure Notice and Target Market Determination before entering into any CFD transaction with us.

The value of shares, ETFs and ETCs bought through an IG share trading account can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

Please ensure you fully understand the risks and take care to manage your exposure.

The information on this website is prepared without considering your objectives, financial situation or needs. Consequently, you should consider the information in light of your objectives, financial situation and needs.

This website is operated by IG Australia Pty Ltd. IG Australia Pty Ltd is located on Level 32, Queen & Collins, 376-390 Collins Street, Melbourne, VIC 3000. ABN 93 096 585 410, Australian Financial Services Licence No. 515106. Derivatives Issuer Licence in New Zealand FSP No. 684191, NZBN 9429047618251.

The information on this site is not directed at residents of the United States or any particular country outside Australia or New Zealand 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.