FTSE 100, DAX and Dow break sharply lower in early trade

FTSE 100, DAX and Dow weaken in early trade, with key support levels broken to highlight potential further downside to come.

FTSE 100 breaks key support after recent gains

The FTSE 100 has broken back below the 6124 support level this morning, pointing towards the potential for further downside after recent gains.

Given the recent consolidation, this could be another decline into the 6080-6100 region of support before we turn higher once again. As such, while the short-term picture looks bleak, we would need to see the lows of the week broken to signal a likely wider period of downside coming into play.

DAX breaks key support after recent Fibonacci rebound

The DAX has failed to maintain its bullish trajectory after finding support on the 61.8% Fibonacci level at 12,750. We have since seen a sharp break back below that support level, with the next Fibonacci support level at 12,616 now coming into play.

As such, further downside looks likely over the near term, but there is a strong chance we are looking at a retracement phase here, the 76.4% Fibonacci support level providing the kind of area that could see the index stabilise once more. Watch out for a break up through the 20 threshold in the stochastic as a sign that this bearish momentum is coming to an end.

Dow reversing lower from Fibonacci resistance

The Dow Jones is on the slide once again this morning, with the recent rally finding resistance on the 76.4% Fibonacci retracement level.

This move lower points towards a potential continuation of the recent trend of lower lows. As such, there is a strong chance we see further downside over the short term, yet the question of whether we establish another lower low or not could be key in determining whether this recent downtrend is going to continue or not.

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