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 S&P 500

Indices took a tumble yesterday, but are holding key support for the time being.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-06-28T09:27:34+0100

US trader

Source: Bloomberg

FTSE 100 – more weakness ahead?

The FTSE is now testing the bottom end of the support zone that has prevented further downside since mid-May. A close below 7370 on the four-hour chart would be a signal that more weakness is ahead, potentially taking us to 7260 and then 7090.

Any bounce needs to clear the sequence of lower highs that has prevailed since the beginning of June. This would need a move above 7490.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX long-term bullish direction

A close below the 50-day simple moving average (SMA) at 12,647 is an ostensibly bearish development, but the last time this happened, back in April, the stay below the indicator lasted barely a day. The DAX has a 100-point zone of support from 12,480 – 12,580 that has held since May, so if this continues then we could see a bounce materialise.

Only a close below 12,480 would be particularly worrying. Dips have been bought all year in this market, and there seems little reason aside from euro strength to be particularly worried about the long-term bullish direction.

DAX chart

DAX chart

DAX chart

S&P 500 support at the 200-day SMA

Yesterday felt like a major day, but it is mainly a reflection of how quiet markets have been. The S&P 500 has fallen to the 2420 support area that has been holding since 9 June, and it has also found support at the 200-day SMA on the four-hour chart at 2418. If this holds then a bounce to 2450 and higher cannot be ruled out.

A drop below here would target 2400 and then 2370, if bearish momentum finally develops in a meaningful fashion.

S&P 500 chart

S&P 500 chart

S&P 500 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.