FTSE 100, DAX and Dow break sharply lower in early trade
FTSE 100, DAX and Dow weaken in early trade, with key support levels broken to highlight potential further downside to come.
FTSE 100 breaks key support after recent gains
The FTSE 100 has broken back below the 6124 support level this morning, pointing towards the potential for further downside after recent gains.
Given the recent consolidation, this could be another decline into the 6080-6100 region of support before we turn higher once again. As such, while the short-term picture looks bleak, we would need to see the lows of the week broken to signal a likely wider period of downside coming into play.
DAX breaks key support after recent Fibonacci rebound
The DAX has failed to maintain its bullish trajectory after finding support on the 61.8% Fibonacci level at 12,750. We have since seen a sharp break back below that support level, with the next Fibonacci support level at 12,616 now coming into play.
As such, further downside looks likely over the near term, but there is a strong chance we are looking at a retracement phase here, the 76.4% Fibonacci support level providing the kind of area that could see the index stabilise once more. Watch out for a break up through the 20 threshold in the stochastic as a sign that this bearish momentum is coming to an end.
Dow reversing lower from Fibonacci resistance
The Dow Jones is on the slide once again this morning, with the recent rally finding resistance on the 76.4% Fibonacci retracement level.
This move lower points towards a potential continuation of the recent trend of lower lows. As such, there is a strong chance we see further downside over the short term, yet the question of whether we establish another lower low or not could be key in determining whether this recent downtrend is going to continue or not.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets