FTSE 100, DAX and Dow pause after sharp declines

FTSE 100, DAX, and Dow is taking a breather following huge declines. With the Dow at Fibonacci support, US indices have the potential to outperform their European counterparts.

FTSE 100 declines back into critical support

The FTSE 100 has slumped back into the 7078 support level, representing the lows from June and August.

Should we see a break below this 7064-7078 zone, it would bring about greater confidence of a downturn. As such, the outlook will be dictated by the ability or inability to break through that support zone.

DAX pauses after sharp decline

The DAX has also turned lower over the course of the week. While the index has not quite managed to return into the lows of last week, there is a strong chance we will see further downside to continue the trend of lower highs and lows.

With the price initially respecting the 61.8% retracement level of 11,540 on the way down, we are now seeing that prior low provide resistance on the way up. A break through 11,864 would bring a more bullish picture into view, yet a bearish picture remains in play until that happens.

Dow finds support on Fibonacci support

The Dow Jones has also managed to arrest the declines following a huge sell-off over the course of yesterday's session. Unlike the FTSE 100 and DAX, this market remains within an uptrend, and the fact that we are seeing Fibonacci support attests to that fact.

Whether or not we break below that 25,394 support level will be key in determining the outlook from here on. Should we break that level, then it would greatly increase the likeliness of a move back below 25,075 and on towards the critical 24,603 June low. However, for now the 25,394 level is the key hurdle to overcome for bears.

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.