Levels to watch: FTSE, DAX and S&P 500

Bearish momentum persists, as investors take flight from equities, with the Fed meeting providing little in the way of optimism.

Data board
Source: Bloomberg

Yesterday’s rally is rapidly fading, as without any dovish support from the Fed and Brexit concerns looming, investors continue to abandon equities for safe havens.

It looks like this will continue into next week’s referendum, with little expected to shift sentiment unless the Remain campaign manages to build a substantial poll lead.

FTSE 100
The index pushed below 5900 in the early morning, but has recovered slightly. However, unless it moves back above 6000, the risk is that the downside momentum will continue to push on down towards 5800, with a close below here taking us towards the January/February lows. A recovery above 6000 would target 6050 in the first instance, and then on towards the 200-day simple moving average (SMA) at 6150.

DAX
A push down towards 9440 has brought out the buyers, as key support from the March and April low comes into play. However, bulls will need to get moving back above 9700 to suggest a bottom is in place.

Overall the broad thrust of momentum remains to the downside, so if the price closes below 9440 then we could see a swift move to 9000 in the short-term.

S&P 500
The gains yesterday swiftly evaporated in the aftermath of the Fed meeting, and while the index is holding above 2060 for now, the next real area of support comes in around 2040.

Bounces, such as that we saw yesterday to 2085, should still see sellers, so a move back above the 50-day SMA at 2078 is the first step to suggest the pullback has come to an end. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.