Levels to watch: FTSE, DAX and Dow

A sharp sell-off for European and US indices is a reflection of risk-off sentiment permeating through financial markets this week. With key support levels in view, will this sell-off continue?

US trader
Source: Bloomberg

FTSE sell-off gathers pace

The FTSE has managed to break lower from not only its range, but also trendline support. It looks like we are seeing a retracement of the rally from the 6767 swing low, pointing towards a possible bounce from the 6852-6876 mark. We have seen no bullish reversal signs and thus for now there is a strong likeliness we will see further downside.

However, we would need to see a break below the 6767 level to negate the medium-term uptrend. As such, be aware we could see a bounce around the corner. 

DAX plummets past 76.4% retracement

This week has seen substantial selling pressure for the DAX, with price falling back below the 76.4% retracement. Much like the FTSE, we have a clear uptrend in play over the past month and we would need a break below 10,347 to negate that.

As such, it is worth noting the possibility of a bounce. However, much of that will be down to political considerations. 

Dow trading in crucial support zone

The Dow Jones has tumbled sharply into the 17,907-17,956 support zone, hitting a 50-day low in the process. The biggest level of note is at 17,907, where a break below could spark a substantial sell-off.

However for now it is worth noting price could find a bounce given the importance of this support zone. The short-term downtrend is clearly defined, yet it makes more sense to either await a bullish intraday reversal sign or a closed hourly candle below 17,907 for the next move. 

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.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.