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Levels to watch: FTSE 100, DAX and S&P 500

The Friday rally has given way to some losses, as geopolitics intervenes. This could be a resumption of the downtrend for the DAX, while the S&P 500 is at a crucial point.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-09-04T09:21:33+0100

Data trader

Source: Bloomberg

FTSE 100 needs to close above 7450 to avoid a bearish development

Having gapped lower overnight, and having fallen back below 7450, it may be that a new selling opportunity presents itself on the FTSE 100.

While on the daily chart the upward move remains intact, and already buyers have stepped in this morning, a failure to post a daily close above 7450, as we saw on Friday, would be a bearish development. Today could prove to be a crucial moment. Further downside momentum would head towards 7300, and then we would see if this zone of support can hold once more.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX remains in downtrend

The downtrend continues on the DAX, having created a new lower high on Friday with the rally to 12,180, and then gapped lower overnight. While the price is off the lows, as long as it holds below 12,180 the downside would appear to hold sway.

Given the ongoing downtrend, the next event to watch for would be the 11,900 lows seen during the previous week. A daily close above 12,180 would reverse the outlook in the shorter term, and build the case for a potential reversal in this index, and likely other eurozone indices as well.

DAX chart

DAX chart

DAX chart

S&P 500 euphoria over, but not all Friday gains lost

Friday’s euphoria in the S&P 500 looks a little dented, but the gap down does not negate the bounce entirely. The move back below 2475 is a potentially negative development, but we will have to wait until the return of US investors tomorrow to see if the bargain hunters will come back in.

Further losses below 2460, which has been strong intraday support, could signal a move below 2450 and then down to 2420. A recovery would need a close above 2480, to leave the way clear for another attempt at 2480 and then 2490.

S&P 500 chart

S&P 500 chart

S&P 500 chart

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