FTSE 100, DAX and Dow expected to reverse lower

​​FTSE 100, DAX and Dow look primed for another turn lower following a bout of upside overnight.

FTSE 100 rebound provides selling opportunity

The FTSE 100 has been regaining ground overnight, with the index rising into the 61.8% Fibonacci retracement level. With global fiscal stimulus measures and bans on short selling helping improve sentiment somewhat, we could be moving into a phase where selling is punctuated by more frequent periods of upside.

However, the downtrend remains in play and thus it makes sense to look for another leg lower from here. With that in mind, a bearish turn lower is expected from here, with a break through 5698 required to negate this view.

DAX rallies into area of resistance

The DAX has similarly managed to regain ground overnight, with the index now trading back around the 50% Fibonacci level.

A standard deviation channel highlights the fact that this move has taken us into relatively overextended levels, and thus the bears look likely to come back into play before long. The downtrend here is undoubtably consistent and will likely remain in play given the ongoing economic decline being seen globally. As such, short positions are preferred here, with a break through the 10,004 level required to negate this downtrend.

Dow Jones rebound unlikely to last

The Dow Jones has seen the shallowest retracement of the three, with the rise only bringing us to the 38.2% level. This could point towards further short-term upside, with the limit-up rules halting the price action for now.

However, we are once again looking at a very reliable downtrend. With that in mind, further weakness is likely to be around the corner, with a break through 23,170 required to negate this bearish outlook. For those wanting a sell signal, watch the hourly stochastic for a breakdown below the 80 level to highlight a reversal in momentum.

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.