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.
Tensions appear to have eased somewhat, but one must question whether the current bounce is sustainable or if it is down to an element of profit-taking and consolidation before it sees an additional leg lower.
FTSE edges back above 6600
Last Friday’s bullish candle coupled with the daily RSI pulling back from the oversold zone has seen the FTSE move back above the 6600 level. The 6587 level – 61.8% retracement from the January lows to the May highs – should now act as support. As yet unable to move back above the 6620 level, this area will need to be overcome if the 50% retracement at 6646 is to be challenged. A move through here targets 6675.
The 100-hour moving average is capping the gains for now so we may see an element of consolidation before the next direction is actually decided.
The 6530 lows provide the key support for now.
Dow moves towards 16,600
The Dow seems to be providing similar signals to the FTSE and price action has moved back into the longer-term trendline support, with the daily RSI also rising from its slump into the oversold zone. We have seen highs of 16,588 so far this morning, so any push through 16,600 will see the 100-DMA at 16,667 targeted.
Any retreat below 16,500 takes us back to 16,446 with the 200-DMA providing the key support on the daily chart.
Price action has risen through the 200-hour MA, although intraday the moves looks a little overbought.
DAX daily RSI no longer oversold
Daily RSI on the DAX is also beginning to shuffle back from oversold. While above the 9080 level there remains a possibility of a move back towards 9173 then 9215.
The hourly chart may be forming an inverted head and shoulders pattern so a break through the 9170/80 level could see this completed. The 100-hour MA is supporting intraday at 9080/5. Any pull backs through this metric target 9040.