FTSE 100, DAX and Dow slump amid risk-off move

FTSE 100, DAX and Dow are on the slide once more, with risk-off sentiment driving a move out of stocks.

FTSE 100 turning lower after recent retracement

The FTSE 100 has finally turned lower again, following a 50% retracement over the first half of the week. The decline seen overnight sees a return to the risk-off sentiment in play in the early hours of Monday morning.

We are likely to see further weakness from here, with a break below 7390 key in furthering the narrative that this index is heading back towards the ascending trendline that underpins a long-term symmetrical triangle. This bearish outlook holds unless we break through the 7516 level to bring about a double bottom formation.

DAX heads back towards Tuesday lows

The DAX has similarly been on the slide overnight, with the index slumping back towards Tuesdays low of 13,164. This looks like the beginning of another leg lower, with the index expected to decline back towards the 76.4% Fibonacci retracement level.

Nevertheless, even if we do see that break it is worthwhile noting that we remain within a wider uptrend that could kick in once again depending on how the coronavirus continues to drive risk sentiment. Thus, a wider bearish picture would only come into play with a break below 12,947.

Dow Jones heads lower after recent gains

A similar story for the Dow Jones, with recent gains being eroded by sharp losses overnight. Interestingly, the 28,448 low comes around the 76.4% support level, pointing towards a crucial area of support down below.

Should that support zone break we would need to see 28,122 broken to signal a wider bearish continuation signal coming into play. To the upside, a failure to break below this prior support - followed by a rise through the recent peak of 28,938 - would bring a more bullish outlook.

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.