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

European markets are trying to recover ground on the Dow, yet with the FTSE 100 and DAX coming into potential periods of consolidation, we are awaiting key breaks to signal further upside.

IG Analyst

Publication date : 2018-08-23T09:49:36+0100

Video poster image

FTSE 100 rebound floundering

The FTSE 100 failed to rally through the 7618 level yesterday, following a bounce from the 61.8% Fibonacci support level.

With the price subsequently failing to break below that 7520 low, we are in consolidation mode currently. Watch for a break through the 7618 or 7520 level for a signal of where we go from here. However, a downside break may represent a shift into the 76.4% retracement rather than the start of a wider bearish phase.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX rallying towards key swing high

The DAX is rebounding towards the 12,462 swing high, which should provide us with a gauge of whether this rebound is set to persist.

An hourly close above there would signal a likely move into the 61.8% Fibonacci (12,593) level at the least. That inability to break below the 12,102 support level last week provided a question mark over the uptrend, but failed to give us a bearish signal. Thus we cannot say with great confidence whether this is a retracement or full recovery. This will only come with a break above 12,888, or the respect and bearish reversal from Fibonacci resistance.

DAX chart

DAX chart

DAX chart

Dow rebounds from crucial support level

The Dow Jones has managed to bounce from the key 25,680 support level, following a period of weakness that has threatened to bring about a more protracted period of downside.

Whether we see an hourly close below that 25,680 level will provide a key clue as to whether we are going to see a retracement of the wider 24,963 rally or simply carry onwards from here.

Dow Jones chart

Dow Jones chart

Dow Jones 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.