FTSE 100, DAX and Dow at risk of short-term declines

FTSE 100, DAX, and Dow are all showing signs of potential weakness after recent gains.

FTSE 100 reversing lower

The FTSE 100 completed a head and shoulders formation yesterday, bringing a more bearish outlook for the index. The wider picture points towards a possible bullish reversal coming into play before long.

However, it looks like we could see further downside over the short term, with the decline below 7205 adding to that bearish theme. As such, further downside looks likely today, with a break through 7245 required to bring about a more positive outlook.

DAX starts to roll over after recent rally

The DAX has been on a consistent rally throughout the past two weeks, bringing the index back into a five-week high yesterday. Nonetheless, the price is now starting to turn lower from a rising wedge formation, pointing towards a possible bearish phase coming into play. It looks as if 12,186 represents the short-term intraday hurdle to overcome in a bid to reverse some of the recent gains.

Alternatively, we would need to see a break up through yesterday's high of 12,244 to bring about a bullish continuation signal. Until then, this index looks at risk of a sharp decline if 12,186 is broken.

Dow falls into trendline support

The Dow Jones has been weakening overnight, bringing its price back into an inside trendline. That support line should be important as a determinant of how things play out today, with a break lower from here pointing towards a day of downside ahead.

Ultimately, such weakness would be seen as a retracement of the rally from 25,973 though, highlighting the short-term nature of such potential declines.

IGA, may distribute information/research produced by its respective foreign affiliates 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.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. 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, and 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.

Please see important Research Disclaimer.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 40
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.