FTSE 100, DAX and Dow declines raise reversal chances

FTSE 100, DAX and Dow decline sharply, with key support levels critical to determining the outlook as we head into a long weekend.

FTSE 100 slumps into crucial support level

The FTSE 100 is on the slide this morning, with the critical 5925 level coming into view. A break below Tuesday's low would provide us with a bearish signal for the day ahead.

The consolidation seen since the beginning of April highlights the potential for this market to break lower and head back towards the 5666 region of support. As such, a decline below 5925 brings a likely bearish phase coming into play, whereas a rise through 6095 would be required to bring a more bullish outlook.

DAX breaks key support to highlight further downside

The DAX has managed to break below the crucial 10,932 support level, thus completing a bearish double top formation.

Given the wider consolidation we have seen since early-April, this is likely to be the beginning of a bearish phase as the index returns to the lower echelons of the 10,152-11,342 range. A break through the 11,250 resistance level would be required to negate this outlook.

Dow Jones declines bring key support level into play

The Dow gains seen either side of last weekend looks to have failed in its attempt to break us out of the consolidation phase that has dominated the past two months. With the index turning lower below the crucial 24,903 resistance level, there is a good chance we will see the wider consolidation continue once more with a bearish move from here.

However, we are yet to see the 24,148 level broken, which would provide the bearish breakdown signal for this index. As such, a bearish outlook would carry greater strength if we see that 24,148 support level broken. To the upside, we would need to see the 24,719 level broken to raise the likeliness of another challenge of the 24,903 resistance level.

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
liveprices.javascriptrequired
liveprices.javascriptrequired

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

liveprices.javascriptrequired

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.