Levels to watch: FTSE 100, DAX and Dow

European markets are leading the declines, with the FTSE 100 and DAX having both broken below their most recent swing lows. Meanwhile, recent losses for the Dow have taken us close to a similar breakdown level.

FTSE 100 rebound likely to fall short

The FTSE 100 is regaining ground, following on from a drop below trendline support. That coupled with the fall below the 7070 mark points towards this current rally being a likely retracement of the fall from 7175.

With that in mind, there is bound to be further upside, this is expected to fall short below 7070. As such, look out for a potential sell-off from Fibonacci resistance, with the 7141 and 7121 levels worth watching from that perspective. A move above 7175 would be required to negate this bearish outlook.

DAX turns higher with sellers expected to return

The DAX is similarly turning higher this morning, following on from an extension of the bearish reversal from the 76.4% Fibonacci retracement (11,662).

This sell-off is likely to continue apace, with another turn lower likely to come into play before long. With that in mind, another bearish turn is expected if the price does not break through 11,609. Fibonacci retracements around the 11,479 and 11,529 level should be watched as potential areas for a bearish move to come into play.

Dow downturn takes us towards key support level

The Dow Jones has not seen much upside yet, following a sharp sell-off from the 76.4% resistance level. The index needs a break below 25,076 to provide greater confidence of a wider sell-off.

Until that happens there is a chance of a period of upside, even if that is a retracement. Given the fact that we have not broken below the first swing low, there is less bearish sentiment for the time being. However, watch for that level to be broken to provide greater confidence of a more protracted sell-off.

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