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CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. 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 S&P 500 all in the red

Indices have continued their downward move this morning, picking up where they left off on Friday.

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FTSE 100 fights to hold 50-day SMA

The FTSE 100 has suffered a sharp pullback, losing 9% from last week’s highs. However, it has managed for now to hold at the 50-day simple moving average (SMA) at 5963. A close below this could be viewed as a negative development, suggesting a drop back towards 5720 or down to 5600 and the support zone from early May.

For now this looks like a drawdown within a rising market, after the solid move higher of early May, a move below 5600 would certainly negate that view. Alternatively, if the price can hold 5960 then a recovery above 6100 might suggest that a higher low has been created.

FTSE 100 chart Source: ProRealTime
FTSE 100 chart Source: ProRealTime

DAX falls to two-week low

Here too the DAX is seeing a severe and rapid drop from the recent highs. Around 1400 points have been wiped off in a week, although this still only leaves the index at two-week lows.

Friday’s bounce to 12,200 met with heavy selling, creating an intraday lower high, reinforcing the short-term bearish outlook. Further declines head towards 11,400 and the upper bound of the March gap down, and then below this we have the 100-day SMA at 11,366 and then the 50-day SMA at 11,112.

DAX chart Source: ProRealTime
DAX chart Source: ProRealTime

S&P 500 retreats further after recent falls

The S&P 500 fell through trendline support in spectacular fashion on Thursday, and a small bounce on Friday failed to gain much traction.

Further declines this morning have taken the index to its lowest level in a month, with further downside targets at 2874 and then 2815. A recovery above 3000 might provide a more near-term bullish view.

S&P 500 chart Source: ProRealTime
S&P 500 chart Source: ProRealTime

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