FTSE 100, DAX and Dow regain ground after sharp declines

​FTSE 100, DAX and Dow attempts to regain ground after sharp declines, yet virus fears could bring further downside.

FTSE 100 starts to regain ground after recent declines

The FTSE 100 has managed to regain some ground this morning, coming off the back of a period of consolidation through much of yesterday. The sharp decline seen after the weekend does point towards further downside, although there is a sense of calm growing despite a rise in virus cases in China overnight.

A rise through the 7642 swing high would bring about a more bullish outlook for the pair, yet another leg lower looks likely until that happens. Such a decline would see us move back towards the trendline support that underpins the symmetrical triangle formation that has been in play over the past year.

DAX rising after sharp drop into Fibonacci support

The DAX also saw huge losses yesterday, with the German index dropping into the 61.8% Fibonacci support level last night. The wider trend remains bullish, yet there is a distinct possibility of another bearish leg lower coming into play before long.

Nevertheless, with the index turning higher despite the news of a coronavirus case in Germany, there is a good chance we will see further upside for the short term. From there, it looks likely we will see another leg lower, with a break through 12,601 required to negate the current bearish outlook.

Dow Jones turning higher from deep pullback

The Dow Jones is similarly regaining ground following a deep retracement, with the price having moved within touching distance of the 76.4% Fibonacci retracement level. A break through 29,282 would point towards a continuation of the wider uptrend, yet it is likely that the gains we are currently seeing are a precursor to further weakness.

As such, while we could see further short-term gains, it makes sense to look for intraday signals of a potential bearish turn if this virus is not brought under control.

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.