FTSE 100, DAX and Dow losses continue amid risk-off move

FTSE 100, DAX and Dow continue to decline, with European losses leading the way.

FTSE 100 declines into wider retracement

The FTSE 100 has been on the slide amid a ramp-up in trade war fears last week. Following on from Asian losses overnight, we are seeing a similarly bearish start to the week for UK stocks.

However, the daily chart below highlights the respect of trendline support following a drop into the wider 7078-7730 retracement. The view that this is a retracement means that we should be looking for an upward turn between the 61.8% and 76.4% Fibonacci levels. With trendline support being respected below the 61.8% level, there is a chance we could start rising before long. Given the clear bearish trend over recent days, watch for bullish intraday signals to bring about greater confidence of such a resurgence.

DAX falls towards critical support level

The DAX has similarly declined heavily throughout the past week, with the index falling towards a crucial area of support.

The wider creation of higher lows could be negated soon, with a break below 11,598 bringing about a picture of further weakness. That is accompanied by the 220-day simple moving average (SMA) which is currently 11,643, with the ability or inability to break through that zone of support proving key to the direction of trade for the week ahead.

Dow continues to decline as trade war drives risk-off sentiment

The Dow Jones has seen selling ramped up over the start of the month, with a break below 26,657 bringing about another bout of downside for the index.

Further downside looks likely with the index now retracing the wider 24,603-17,402 rally. As such, a bearish picture remains unless we see a rise through the 26,576 level.

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