Levels to watch: FTSE 100, DAX and Dow

US indices are expected to underperform once again with the Dow looking bearish. Meanwhile, the grind higher continues for the FTSE 100 and DAX.

DAX
Source: Bloomberg

FTSE 100 pullback bringing another turn higher

The FTSE 100 drifted into trendline support overnight, with the recent uptrend remaining on track amid a turn higher in recent price action.

The price is clearly in a low volatility phase, with the Bollinger band squeezing to highlight such a move. This current turn higher points towards a move back into the near-term resistance level of 7752, above which we have the all-time high of 7796. A break below 7685 would negate this bullish outlook.

DAX finding trendline support amid grind higher

The DAX is gradually gaining ground, following on from a fall back into trendline support once more this morning.

The wider trend is clearly bullish and, as long as we do not see the price fall below the 12,852 swing low, it is likely any short-term weakness is there to be bought into.

Dow fightback falling short after wedge breakdown

The Dow Jones rebound is faltering once again this morning, with the index heading back towards Tuesday’s low of 24,628. Rising US treasury yields, coupled with a rising dollar have ensured that we are seeing underperformance in US markets, which looks likely to continue.

The ability to break below that 24,628 level would be key in solidifying the short-term bearish outlook, while a rally through 24,801 would go a long way to bringing a more bullish outlook. The wider picture is a bullish one following the rally through 24,860. However, there is a strong chance we could see the index turn lower as a retracement of the 23,531-24,994 rally.

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