Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Levels to watch: FTSE, DAX and Dow

Indices begin to show signs of turning following period of strong upside.

A man with data reflected in his glasses
Source: Bloomberg

FTSE rounding off as we await confirmation of retracement or consolidation

The FTSE has traded largely sideways over the past two trading days. However, the failure to create a new high above the 6808 resistance level is a warning sign that we could be seeing the beginning of a retracement lower. We have not seen the new low to confirm that, and thus I would be bearish over the short term should the price move below 6750. However, this could simply be a period of sideways consolidation and a move above the 6808 level would bring a renewed bullish outlook. 

FTSE 100 chart

DAX failure to create new high brings possible retracement

A similar story for the DAX, with today’s price action showing a new lower high. This failure to push above the 11,800 resistance, which was Thursday’s high, signals the possibility of a move lower in the coming days. I would need to see a move below 11,650 and 11,600 to gain confidence that we are going to see a move back towards the 11,448 and 11,344 region.

DAX chart

Dow also showing signs of turning despite early strength

The Dow Jones is also in the process of creating a new lower high, below Thursday’s 18,154 peak. I would need to see a move above that resistance point to give me confidence that we will continue to move higher. Otherwise the writing could be on the wall for a period of downside back towards 17,914. However, for this bearish view to be confirmed, I would need to see a move below the 18,030 and 18,010 support levels.

Dow Jones chart

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.

Find articles by analysts