Levels to watch: FTSE 100, DAX and Dow

Short-term weakness could bring buying opportunities for the FTSE 100, DAX and Dow. 

German stock exchange
Source: Bloomberg

Will FTSE 100 rebound?

The FTSE 100 managed to gain ground after selling off into the 76.4% retracement yesterday, seeming relatively consistent, if unremarkable, and buying pressure. Today we are seeing a weakness at the open, with the price threatening to move out of this short-term bullish move. However, for the bearish outlook to come back into play, we would need to see a break below 7228.

Until then, there is a chance we could simply be seeing another short-term pullback before the index moves higher once more. The 61.8% retracement and 50-hour simple moving average (SMA) support level has so far marked the low of the day. As long as we do not break below 7228, another move higher looks likely from here.

DAX turning lower, yet buyers likely to return

The DAX is moving lower in a similar manner to the FTSE 100, with the price falling out of a rising wedge pattern. However, given the bullish breakout seen yesterday, this looks like a potential buying opportunity rather than something to worry about.

As such, watch out for a potential move into the 12,531 Fibonacci support level (76.4%) for a possible bullish setup. A break below 12,505, and in particular 12,490 would negate this bullish outlook.

Dow pullback could provide buying opportunity

The Dow Jones is seeing a slight amount of weakness this morning, coming off the back of yet another record high. Whether we see this sell-off persist or not, remains to be seen, yet any further downside would simply provide us with a better buying opportunity as we seek to get in on this uptrend.

A break below 22,286 would negate this short-term uptrend, with longs preferred unless we break that level. 

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 IGA 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.