FTSE 100, DAX and Dow could retrace after recent gains

​FTSE 100, DAX and Dow are starting to show tentative signs of weakness after recent gains. Will this break the bullish outlook or provide a buying opportunity?

FTSE 100 upside proving short-lived after sharp decline yesterday

The FTSE 100 fell sharply into the 7473-7484 support zone yesterday, pointing towards the possibility of a wider breakdown should the index fall back below that 7473 low.

With the index currently on track to form a bearish engulfing pattern, we could see another challenge of that zone. The short-term outlook will be determined by whether that level is broken or not. Should that occur, we will be looking at a potential decline into the 76.4% retracement at 7430.

DAX starts to ease after sharp gains

The DAX has clearly outperformed its UK counterpart, with the index rallying sharply throughout the week.

We are looking at a potential bearish engulfing pattern with this current candle, pointing towards the potential for a short-term pullback. However, should that happen we would be looking at it as a retracement phase where a wider bearish picture only comes into play in event that the index declines below 12,465.

Dow continues to trade within consolidation zone

The Dow Jones has been trading within a consolidation phase over the course of the past fortnight, with the price attempting to gain ground overnight.

That rally has failed to break through 27,370, and there is a chance we will continue to consolidate rather than break out of this phase. Certainly, a break below 27,187 would raise the likeliness of a continued directionless consolidation phase. However, if we break through the 27,370 level, it would point towards a possible bullish breakout and exit from this two-week phase.

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.