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

The FTSE 100 looks set for further downside, while the DAX and Dow are likely to leave the overnight weakness behind, with another leg higher.

FTSE 100 breaking into another bearish phase

The FTSE 100 has been trading within an ascending triangle formation over recent days. However, with the price falling below the 7711 swing low, we appear to be seeing the beginning of another leg lower for the index.

Greater confidence in this notion would be gained should the price break 7684, yet for now we are seeing the tentative first bearish signs. Watch for an hourly close below 7711 as a bearish signal, where the price would have to break up above 7747 to return a more positive outlook. 

DAX consolidating after recent run

The DAX has been on a strong run of late, with the price trading in a symmetrical triangle formation off the back of an incredible bullish trend.

We have seen a 38.2% pullback thus far, with any further short-term weakness looking like a deeper retracement before we see the price move higher once again. With that in mind, whether we see a deeper retracement or not, it is likely that we will see the price turn higher soon enough to continue this trend.

Dow turning higher from 50% retracement

The Dow Jones is pushing higher once again, coming off the back of a 50% retracement on Tuesday.

This is just the latest in a long line of retracements, each of which typically resolves with a strong move higher for the index. We are trading within a bearish rising wedge formation, which could point towards an eventual breakdown for the index. However, for now, we expect further upside to come, with a break below 25,971 required to negate the bullish outlook.

This information has been prepared by IG, a trading name of IG Markets 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