Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

European indices open higher after hefty declines last week

Trading outlook on FTSE 100, DAX 40, and Dow after last week’s sharp sell-offs.

​FTSE 100 recovers from last week’s lows

The FTSE 100 opened up today and thus continues its recovery rally from last week’s 7,227 low, made close to the current May low at 7,157, amid volatile trading due to recession fears, a near 50-year low in UK unemployment data and the annual inflation rate rising to a 40-year high at 9% in April compared to 7% in March.

Last week’s high at 7,545 is back in the picture, a rise above which would target the 7,621 early May high. Above this level sits key resistance in the 7,657 to 7690 area which is made up of the January 2020, February, and April highs and as such is likely to cap. 

Support below the 55-day simple moving average (SMA) at 7,433 and the 2 May low at 7,390 is seen between the 11 May high and the 200-day SMA at 7,354 to 7,326.

Provided the current May trough at 7,157 isn’t slipped through, the bulls retain the upper hand.

FTSE 100 chart Source: ProRealTime

DAX 40 retests its downtrend line after volatile week

The DAX 40’s recovery rally from last week’s 13,685 low is set to continue ahead of today’s German Ifo Business Climate publication for May which is forecast to come in at 91.5 versus 91.8 in April.

This year’s downtrend line at 14,196 is likely to be breached today with last week’s high at 14,282 being back in sight. This should remain the case while the DAX stays above last week’s trough at 13,685 on a daily chart closing basis.

Together with the 14,315 early May high, the 14,282 level offers a resistance zone for the index, a rise above which would have clear bullish implications, however, targeting the 14,599 April high. For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to ensue.

Slips are likely to find support along the 55-day SMA at 14,056 with further support sitting between the mid-April low and Wednesday’s high at 13,882 to 13,875.

Further minor support can be found at the 13,807 2 May low and at the 13,538 April trough.

DAX 40 chart Source: ProRealTime

Dow tries to stabilise after dismal week

The Dow Jones Industrial Average fell to last week’s 30,637 low, the lowest level seen since March 2021 when the index formed an interim bottom at 30,545, as growth and inflation worries hit.

The index is expected to stabilise ahead of Tuesday’s US S&P Global manufacturing and services PMI data release for May, at least in the short-term, and try to revisit the February and March lows as well as its one-month downtrend line at 32,234 to 32,440 over the coming days, now that a “Hammer” has been formed on Friday’s daily candlestick chart, that is to say a bullish reversal candle.

While the Dow doesn’t manage to heave itself back above last week’s high at 32,756, though, the downtrend remains very much entrenched since a series of lower highs and lower lows can clearly be made out on the daily chart.

Failure at last week’s low at 30,637 would engage the 30,545 March 2021 low and most probably also the 38.2% Fibonacci retracement of the pandemic uptrend and pre-pandemic high at 29,800 to 29,568.

DJIA chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.