Levels to watch: FTSE 100, DAX and Dow

Gains across global indices have been greeted with near-term downside. However, with uptrends in place, further gains seem likely.

FTSE 100 turning lower from trendline resistance

The FTSE 100 has turned lower this morning, following a rally into trendline resistance overnight. With the price showing an arising wedge formation, there is still a strong likeliness that we will see further upside to come.

Given the current pullback, it makes sense to look for longs around the 50-61.8% retracement zone (7263-7245). A break below 7186 would provide a bearish signal, bringing about a likely sharp move lower for the index.

DAX turning into key support level following triangle breakout

The DAX is turning lower this morning, following Friday’s break through trendline resistance. With the index clearly starting to trend higher, it looks likely that this downturn will be short-lived.

A move below 12,482 would point towards a likely retracement of the 12,281-12,612 rally. Until then, watch for a possible rebound from the 12,482 and trendline support. A break below the 12,281 level would be required to negate this bullish outlook.

Dow retracing following yesterday’s breakout rally

Yesterday saw the Dow Jones push sharply higher, following a move through 25,428 resistance. This uptrend is likely to continue, with the current pullback likely to be short-term in nature.

With the middle Bollinger band up ahead (the 20-day simple moving average [SMA]), watch for a potential reversal higher in the short term. Should we break below that indicator, watch for a Fibonacci retracement of the 25,428-25,823 rally as potential buying opportunities. This bullish outlook remains unless the price falls below 25,428.

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.