CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

FTSE 100, DAX and Dow likely to continue the short-term recovery

FTSE 100, DAX and Dow weakness looks to be short-lived, with indices remaining within bullish short-term uptrends.

FTSE 100 pullback could bring buying opportunity

The FTSE 100 managed to create a fresh one-month high this morning, with the price having pushed through the crucial 5828 resistance level on Thursday. We are yet to see a bearish reversal signal come into play, and thus there is likely to be further upside to come as long as the short-term picture remains bullish.

With that in mind, further upside looks likely despite the weakness we have seen in the past two hours. As such, further upside is expected, with a bullish short-term picture in play unless we see a break below the 5800 swing low.

DAX continues its grind higher after hitting one-month high

The DAX similarly managed to break into levels not seen since mid-March, with the prospect of a more open Europe helping drive positive sentiment for the time being. The next bearish phase may come from earnings data, or another rise in cases once businesses have been allowed greater freedom to open.

Until then, there is a good chance of short-term upside. The DAX chart highlights a clear uptrend in play, with each marginal pullback being greeted by another leg higher for the index. With that in mind, further upside looks likely unless we see a break below the 10,485 swing low.

Dow rebounds after break below support

The Dow Jones fell below the 23,342 support level yesterday, raising doubts over the possibility of further upside. However, with the price having subsequently rallied through the 23,780 level, we are now looking at things in a more optimistic light.

Ultimately, the question is whether we see a break through the 24,011 level to continue this uptrend or not. With the price having passed the 76.4% Fibonacci level, there is a good chance that we will see the price break higher. However, it makes sense to await such a break given the proximity to that breakout level. To the downside, a break below the 23,088 level would bring about a more bearish outlook.

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.

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