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Levels to watch: FTSE 100, DAX and Dow

Recent upside for European and US indices have brought about some respite. However, with the recent downtrends remaining intact, there is still a chance of further selling.

IG Analyst

Publication date : 2018-11-06T09:32:26+0000

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FTSE 100 turning lower after recent rebound

The FTSE 100 is showing signs of a potential bearish shift, with a break below Friday’s low of 7072 providing a strong possibility of a pullback from here.

Given the fact that the rebound from late October came from the crucial historical level of 6841, there is a good chance we are seeing the beginning of a wider bullish move come into play. With that in mind, watch for any such near-term weakness to be a potential pullback rather than reversal. A break below 6841 would bring a medium-term bearish view into play.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX turning lower from Fibonacci resistance

The DAX is starting to weaken once more, coming off the back of the rejection at the 76.4% retracement level of 11,662.

This points towards another potential sell-off, with a bearish view in play until we break to a new higher high. For now, that means we look for another leg lower unless the price breaks above 11,852.

DAX chart

DAX chart

DAX chart

Dow rally could come under pressure

The Dow Jones is starting to show signs of weakness, with the market still remaining within the downtrend that has been in play throughout October. The ability to break through 25,862 will be key to signaling a bullish break for the index.

However, until that happens, there is still a good chance of further downside, with a break below 25,076 providing greater confidence of such a move.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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