Levels to watch: FTSE 100, DAX and Dow

Global indices have been breaking lower, with FTSE 100, DAX and Dow looking likely to see further downside.

FTSE 100 rally unlikely to last

The FTSE 100 has managed to break below the crucial 7553-7600 support zone, bringing a heightened bearish outlook for the index. Overnight gains have taken the index back into the 7543 swing low from last week, yet we are already seeing the sellers come back in once again.

With such a shallow rally, it makes sense to await an hourly close below 7489 to provide another bearish signal. Alternatively, a deeper retracement of yesterday’s sell-off would also look attractive for shorts. A break above 7696 would provide a more bullish outlook.

DAX consolidates after recent losses

Yesterday saw the DAX fall drastically, as the trade war sell-off gathers pace.

This morning has seen a relatively low-key rebound, and with trendline resistance up ahead, there is a good chance we will turn lower yet again before long. As such, a bearish outlook remains in play unless we see a break through the 12,611 swing high.

Dow breaks key support level

The Dow Jones managed to break below the 24,247 swing low yesterday, bringing about another bearish development. The trend over the past fortnight has clearly been a bearish one, and this short-term trend is likely to persist.

With that in mind, further downside is expected unless we see a break through the 24,664 high set on Friday. The middle Bollinger band has been a good indicator to predict when we will see the market turn lower, and with that line currently at 24,459 there is a good chance that short-term gains would be fleeting.

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