FTSE 100, DAX and Dow ease back after huge gains
FTSE 100, DAX, and Dow start to ease back, following on from Friday’s blockbuster rally.
FTSE 100 pulling back after Friday breakout
The FTSE 100 managed to break through the 7227 resistance level on Friday, bringing about a bullish signal for the index. The rise of the pound has ensured that the index has underperformed recently, yet with the pound weakening against the US dollar this morning, there is a chance we could see that paradigm shift today.
Nevertheless, the index is turning lower in what looks like a retracement of the rally from 7110. As such, this weakness is viewed as temporary, with a deeper decline providing us with a buying opportunity for the index.
DAX starts to ease back after blockbuster rally
The DAX enjoyed an impressive rally to close out last week, with the index reaching a two-month high. With such a sharp rise in play on Friday, the sentiment seems to be shifting as we start this week.
This could simply be a retracement, but given the size of the prior rally, such a retracement could be fairly significant in size. As such, watch out for further downside over the short term, with the retracement phase unlikely to be over yet.
Dow weakening after sharp rally
The Dow Jones similarly gained a huge amount of ground last week, with the improved sentiment around US-China talks driving the index higher. Today represents Columbus Day in the US, yet IG markets remain open nonetheless. The drop we are seeing is similarly likely to be a retracement, yet the size of Friday’s rally points towards further downside to come.
A break through 27,073 would provide us with a wider bullish picture for the index, and that failure to create a new high above 27,073 provides greater confidence that we are due some weakness for the near term.
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
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.