FTSE 100, DAX and Dow eases back, yet wider bullish picture remains

FTSE 100, DAX and Dow has slipped lower, yet key support points towards a potential impending upside move.

FTSE 100 turning higher after decline into 61.8% retracement

The FTSE 100 saw sharp declines yesterday as it fleetingly created a new three-week high.

This recent decline is likely to be a retracement of the 7370-7621 rally, although we are yet to see a bullish signal to take us out of this current consolidation/retracement phase. That means the current rebound has a high likeliness of faltering once more, with a potential decline back into the 76.4% retracement at 7429. There is an argument on both sides here, and it makes more sense to look for longs at either the 76.4% level or on the break through 7544.

DAX consolidates after decline into 76.4% retracement

The DAX saw sharp losses yesterday, with the index slipping back into the 76.4% retracement level around 12,289.

Given the prior break through 12,465, there is a strong chance that yesterdays sell-off was a retracement which will be followed up by a bullish phase. We have since seen some strength come back into play, yet those gains are being eroded in early trade today. The key here is the ability to maintain the price action above 12,289, with a break below pointing towards a possible wider breakdown below 12,193. Until that happens, a more bullish picture is expected to emerge.

Dow finds support range bottom

The Dow Jones has once again declined into the 27,068 support level, with the index seemingly happy to trade within a range following the creation of a new record high earlier in the month.

The respect of this level points towards a likely bullish session today to maintain this range consolidation. Ultimately, we would expect the breakout to be bullish given the upside move into it. However, greater clarity on the next move comes with a break through either 27,068 or 27,370.

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 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.