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 rebound, yet risks remain

FTSE 100, DAX and Dow rebound, but risks remain given the existence of resistance up ahead.

FTSE 100 rebounds from trendline support

The FTSE 100 has managed to rebound from trendline support once more, following a decline into the confluence with the 76.4% Fibonacci retracement level at 6082. Much like the Fibonacci pullback seen towards the end of June, the subsequent rally has thus far failed to rebound into a fresh high.

Instead we are seeing the price rise towards trendline resistance, with the price already starting to lose momentum. With that in mind, we are trading within a symmetrical triangle which points towards continued consolidation until we see a breakout from the pattern. That means a potential downturn over the short term, with a break through either 6264, or 6026 required to signal an exit from this tringle pattern.

DAX rally likely to come under pressure

The DAX has similarly managed to regain ground in early trade, with the index breaking back into the top end of a rising wedge formation.

That brings about a possibility that we will turn lower once again to continue the wider trend of lower highs seen since the June peak of 12,938. A break through the 12,617 level would be required to negate the recent trend of lower highs. Until then, there is a risk that this mornings rally falters once again.

Dow Jones consolidates above SMA support

The Dow has been trading above the 200-day simple moving average (SMA) over recent days, with the previous trendline seen in May and June also coming back into play. The index is on the rise once again this morning as the market continues to track that confluence of trendline and SMA support.

With trendline and Fibonacci resistance up ahead, there is a chance we could see another slump before long, with a break through 26,423 ultimately required to bring about a wider bullish theme into play. Until then, the short-term gains could be capped once more if we see a breakdown below this confluence of SMA and trendline support. For now, the grind higher continues for the Dow.

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

  • 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.