Levels to watch: FTSE 100, DAX and Dow

European and US indices flounder after a recent flight to safety. With key support levels in question now, could we see another strong move lower today?

German stock exchange
Source: Bloomberg

FTSE 100 falls into trendline support

The FTSE 100 dropped below the key 7457 support level, pointing towards a retracement of the wider move from 7341. So far we have dropped below the 50%, with the 61.8% in view, should we break below trendline support.

In either case, as long as the price remains above 7341, this current downturn looks like a buying opportunity rather than anything to worry about. 

DAX heading back to key support

The DAX fell into the critical 12,098 support level yesterday, with the price posting flat lining lows. A break below the 12,085-12,098 zone would point towards another strong move lower for the index.

As such, with price resuming its weakness, keep an eye out for a break below that level as an indication that the bullish price action of late has been negated. Until then, there is a good chance we could bounce from the support zone given the fact that every challenge of that area in the past fortnight have been greeting by buying.

Awaiting break from Dow range

The Dow Jones has been trading in a range since falling below the key 22,082 support level.

For now we await the range break, where an hourly close above 22,058, or below 21,995 will give us a bullish or bearish signal. Given the move coming into this pattern, a bearish outlook is preferred.

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.

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