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 S&P 500

Now that the Fed is out of the way, we look to see whether indices exhibit their usual late-September weakness, or whether the bulls can retain control.

Stock exchange
Source: Bloomberg

FTSE 100 with a definitive month ahead

Both bulls and bears are waiting to see whether FTSE 100 can take out the 7294 level. This key area of resistance, previously an area of support, will define the outlook for the index heading into October.

A push above this level targets 7320 and then on to 7450, the big resistance level of August. Meanwhile, a drop back below the lows of last Friday at 7194 would suggest a test of 7187 and then 7090. 

DAX moving into period of gains

A post-Federal Open Market Committee (FOMC) push higher has been knocked back this morning. The potential for bearish divergence on the four-hour chart between the price and stochastics indicates that we could be about to see a broader pullback for DAX.

Since the breakout earlier in September, retracements have been fleeting. Therefore, any drop back to 12,500 or lower should still be viewed as a chance to add to long positions, or initiate new ones, as the index heads towards fourth quarter (Q4). This period tends to see strong gains over the three months (average return: 6.8% over the past 15 years).

S&P 500 unable to break through 2510

As usual on Federal Reserve (Fed) days, a drop immediately following the statement was met by buying, with the S&P 500 moving back above the 2500 level.

However, it has so far been unable to move above 2510 this week, so this is the upside level to watch for now, as a break above here puts the index back in all-time high territory. As has been noted already this week, retracements in US markets have been fleeting, but with the Fed out of the way a broader drop back towards 2490 could be possible, or even to 2483. 

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