FTSE 100, DAX and Dow lose ground in early hours

FTSE 100, DAX and Dow have been losing ground, with the DAX and Dow now exhibiting signs of a potential bearish breakdown.

FTSE 100 moving higher within recent downtrend

The FTSE 100 has been trending lower over the course of the past week, with the index declining into the 76.4% Fibonacci retracement level.

The uptrend seen throughout much of October still has a chance of coming back into play, with a break through the 7199 level providing a bullish signal from here. Conversely, a break back below the 7110 level would signal a likely bearish phase coming into play.

DAX shows signs of potential weakness

The DAX managed to rally into trendline resistance last week, with the index providing a very consistent rally over the past two weeks.

However, with the price having moved into a crucial zone of resistance, the current consolidation does highlight a risk that the index could begin to reverse lower from here. With a head and shoulders formation coming into play if 12,598 is broken, keep an eye out for whether that support level is breached as a key determinant of market sentiment today.

Dow breaking lower from trendline resistance

The Dow Jones has started to show a more pessimistic side despite recent gains, with the rally into trendline resistance giving way to downside.

The price is currently respecting the 200-day simple moving average (SMA) as support, which has been accompanied by the 76.4% Fibonacci retracement at 26,784. With that in mind, greater confidence of a breakdown comes with a break below 26,676. Otherwise, there is still a chance that we could rebound from this area given the confluence of Fibonacci and SMA support.

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