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FTSE 100, DAX and Dow lose ground in early hours

FTSE 100, DAX and Dow have been losing ground, with the DAX and Dow now exhibiting signs of a potential bearish breakdown.

FTSE 100 moving higher within recent downtrend

The FTSE 100 has been trending lower over the course of the past week, with the index declining into the 76.4% Fibonacci retracement level.

The uptrend seen throughout much of October still has a chance of coming back into play, with a break through the 7199 level providing a bullish signal from here. Conversely, a break back below the 7110 level would signal a likely bearish phase coming into play.

DAX shows signs of potential weakness

The DAX managed to rally into trendline resistance last week, with the index providing a very consistent rally over the past two weeks.

However, with the price having moved into a crucial zone of resistance, the current consolidation does highlight a risk that the index could begin to reverse lower from here. With a head and shoulders formation coming into play if 12,598 is broken, keep an eye out for whether that support level is breached as a key determinant of market sentiment today.

Dow breaking lower from trendline resistance

The Dow Jones has started to show a more pessimistic side despite recent gains, with the rally into trendline resistance giving way to downside.

The price is currently respecting the 200-day simple moving average (SMA) as support, which has been accompanied by the 76.4% Fibonacci retracement at 26,784. With that in mind, greater confidence of a breakdown comes with a break below 26,676. Otherwise, there is still a chance that we could rebound from this area given the confluence of Fibonacci and SMA support.

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.

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