Levels to watch: FTSE, DAX and Dow

Modest losses continue, and while signs of buying are emerging, a full afternoon of Federal Reserve speakers could keep the bulls in check.

Trader in the New York Stock Exchange
Source: Bloomberg

Fed speakers may make FTSE 100 nervous

We have seen the FTSE move back from all-time highs, and dip below the 50-hour simple moving average (SMA) – 7372. However, buyers appear to be entering around 7350; with a busy day of Federal Reserve speakers on tap we could see further nervousness back down to 7320. A move back into the 7280/7320 zone would mark a consolidation, with a potential break lower. The target to break remains 7400.

DAX uptrend set to continue

The pullback from above 12,000 has seen the DAX price return to the rising trendline off the 8 February low. If buyers can mount a defence here then a rally back to 12,100 could be in order.

A loss of 12,000 could suggest a move back to 11,858, while even a drop to the 50-day SMA at 11,685 would still leave the index within the longer-term uptrend. 

Dow rally not to be underestimated

It is important to note the Dow Jones could go all the way back towards 20,840, another 120 points lower, and still be within the immediate uptrend from early February. The index has dropped back from all-time highs but is now heavily oversold.

With a busy afternoon of Fed speakers, US assets will be primed for volatility, but it would be wise not to underestimate this rally. A drop below 20,800 would be needed to really suggest the bounce has come to an end. 

IGA, may distribute information/research produced by its respective foreign marketing partners 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.

This information/research prepared by IGA or IG Group is intended for general circulation. 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 or 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. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer