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Levels to watch: FTSE 100, DAX and Dow

A mixed outlook points to a non-cohesive market sentiment across the board, with a bearish FTSE 100 breakdown coming amid a rebound for the DAX and Dow.

IG Analyst

Publication date : 2018-08-14T09:36:33+0100

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FTSE 100 breaking lower from rising wedge

The FTSE 100 is turning lower at the open this morning, with the overnight rise forming a bearish rising wedge formation.

That points towards a likely continuation of the recent losses, with a strong possibility that the index will return to the lower end of the range in play over the past two months. With that in mind, watch for a potential downward extension, with 7614 the next support level of note. A break above 7673 would be required to negate this short-term bearish outlook.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX rebounding from confluence of support

The DAX is rebounding from a key confluence of support, with the price rising after moving within touching distance of trendline and 76.4% Fibonacci support yesterday.

This comes off the back of a sharp sell-off following the completion of a head and shoulders pattern. Given the shallow nature of this rebound, there is a good chance we will see further upside for the near term, even if we are looking at a retracement.

DAX chart

DAX chart

DAX-4-hours_LRG

Dow attempting to regain ground after recent decline

The Dow Jones is moving higher following a strong sell-off over the past week.

Crucially we have not broken the 25,114 level, below which we would be looking at a wider bearish shift for the index. Until that happens, there is a good chance we could turn higher from here, with an hourly close above 25,378 pointing towards a period of upside. Conversely, an hourly close below 25,114 would signal a likely breakdown from here.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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