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. See full non-independent research disclaimer and quarterly summary.
FTSE could slip to 6690
Since midday yesterday the 6800 level has held as support, allowing the FTSE to consolidate and move higher this morning. So long as we hold above 6800 then we look to a test of the 20-day and 50-day simple moving averages (SMA) at 6870, followed on by a close above 6910. The daily relative strength index is rising for a second day, but has yet to break its 10-day SMA, while the stochastic momentum index is still bearish.
If these two indicators can turn higher then the upward move of the past two days may have more legs to it. For the time being the 200-day SMA at 6690 should be regarded as a downside target if we see markets fall back once again.
DAX supported by 11,800
Patience is one of the cardinal virtues, and it is certainly required for traders of the DAX and other eurozone indices at present. Although they have not moved substantially lower, upside gains are still distinctly lacking as well.
A close through 12,085 is needed to confirm that the buyers have the upper hand, while 11,800 continues to stand as support on the downside.
Dow eyes close above 17,600
US indices have still to lift themselves from the March lows, with yesterday’s move back above the rising October trendline being cancelled out so far this morning. The 20-day and 50-day both sit at 17,861, with the former on the verge of crossing below the latter. A failure to hold above 17,600 would signal a fresh test of the 200-day SMA at 17,368 is on the way, while any rally must clear 17,800 first.