Levels to watch: FTSE 100, DAX and Dow

Despite recent gains, tentative bearish signs are coming into play for European and US indices.

Source: Bloomberg

Will FTSE 100 rebound last?

The FTSE 100 rebounded back into the 7623 mark overnight, respecting the 7569 support level. Given the wider 7543-7706 range in place over the past month, there is a chance we could see another move lower to reach that 7543 level.

However, the key to whether we will break higher without reaching that support level is down to whether we see a break above 7623 or not. As such, a push below 7569 would point towards a short-term move into 7543 support, whereas a rally above 7623 would signal a return to a bullish short-term outlook.

DAX looks set for another move lower

The DAX is rolling over again this morning, following a rebound overnight. This looks like a retracement, with further downside likely to bring us into the 61.8% Fibonacci level at 12,308.

A break and hourly close below 12,390 would provide greater confidence of that next move lower for the pair. While further downside looks likely in the near term, this is perceived to be within a wider bullish rebound. As such, the index is expected to turn higher soon enough, with a break below 12,102 required to negate that idea.

Dow wedge could spell trouble

The Dow Jones came under pressure earlier in the week, following on from a strong symmetrical triangle breakout on Friday.

With the index struggling to regain ground lost on Tuesday, we are seeing the index trade within a bearish rising wedge formation. This could spark a stronger move lower, where an hourly close below 24,664 would provide that near-term sell signal. 

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