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Levels to watch: FTSE 100, DAX and Dow

European and US indices have been attempting to regain ground, yet with recent price action taking us back into Fibonacci support, we could start to see markets turn higher before long.

IG Analyst

Publication date : 2018-10-19T09:59:38+0100

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FTSE 100 rebounding after yesterday’s pullback

The FTSE 100 is trading back at trendline resistance this morning, following a rally off the back of a retracement into the 61.8% support level.

There is a strong chance that we will be looking at a potential bullish breakout for this index unless we see a move back below 6922. The key to gaining confidence that this market is set for a bullish surge would be a rally through the 7078 swing high.

FTSE 100 chart

FTSE 100

FTSE 100 chart

DAX turning higher after 76.4% retracement

The DAX has declined since the initial surge seen in the first half of the week, with the price falling into the 76.4% retracement.

The index is turning higher since hitting that Fibonacci support level, and this could provide us with a potential resurgence. The key is the ability to remain above the 11,397 level, with a move into the area between 11,505 and 11,397 providing a warning signal that such a break could come into play.

DAX chart

DAX chart

DAX chart

Dow drifts lower after recent resurgence

The Dow Jones has turned lower into the 61.8% retracement this week, following a break below trendline support.

The wider respect of an ascending trendline at the market low of 24,896 highlights the potential for a significant market bounce, with a break below that low signaling a possible substantial breakdown. Until then, there is a strong chance that we will see this market turn higher before long, with any short-term decline simply pointing towards a move into the 76.4% Fibonacci at 25,124. Thus unless we see a break below 24,896, a bullish resurgence looks likely before long.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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