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Levels to watch: FTSE 100, DAX and Dow

Further comments from Donald Trump pushed the indices lower once more, with the FTSE 100 breaking a key support level. With strength coming into play this morning, could we be due another leg lower?

IG Analyst

Publication date : 2017-08-11T08:54:02+0100

The City of London

Source: Bloomberg

FTSE 100 drops below key support

The FTSE 100 has continued to suffer, with the risk-off sentiment ramped up once more thanks to Donald Trump. Now that we have seen the price break below the 7341 mark, this has bearish implications going forward. This now paints any rallies as something to be sold into.

The current bounce we are seeing on the hourly chart is moving back towards that 7341 resistance level, which would look like an area for the sellers to come back into. A bearish outlook is now in play unless we see the price break above 7354.

FTSE chart

FTSE chart

FTSE chart

DAX pushing higher from key support

The DAX is rebounding from the crucial 11,941 region, coming off the back of a particularly strong downside move for the index. Given the size of the move into this bounce, there is a large amount of ground to make up, even if this is just a retracement of the move from 12,338.

As such, while further losses could be around the corner, there is a good chance we could see an extended bounce for the near term.

DAX chart

DAX chart

DAX chart

Dow rebound points towards trendline resistance

The Dow Jones is bouncing off the back of a sharp sell-off yesterday. This points towards the potential for a period of strength this morning. However, it is worth noting that unless we break above 21,968, it is likely that further selling could be around the corner.

Look towards the confluence of the 61.8% retracement (currently 21,914) and trendline resistance as a potential point of reversal.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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