FTSE 100, DAX and Dow rebound unlikely to last

FTSE 100, DAX and Dow continue to gain ground, yet a bearish turn doesn’t seem too far away.

FTSE 100 regains ground after recent sell-off

The FTSE 100 has been attempting to recover lost ground following last weeks sharp sell-off which saw the index hit a low of 7003 on Thursday. Since then we have seen the index rise, with that intraday trend of higher highs and higher lows providing a consistent period of upside for the pair.

Watch for that trend to continue as a signal that we are going to see further upside. There is a good chance this is a retracement of the wider decline from 7441. However, with the price yet to reach the likes of the 61.8% or 76.4% Fibonacci levels, further upside seems likely for now, with a break below 7184 required to negate that short-term trend and resume the bearish trend evident on the wider timeframes.

FTSE 100 chart Source: ProRealTime

FTSE 100 chart Source: ProRealTime

DAX gradually on the rise

The DAX also fell sharply last week, with the index gradually regaining ground since.

The ability to continue forming higher lows is key here, with the improved German industrial production figure helping to push the index into a fleeting new high for the week. Ultimately, this rally does look like a retracement of the wider sell-off from 12,496, pointing towards a breakdown before long. However, that bearish picture only comes back into play in the event we see a break below the 12,072 swing low.

DAX chart Source: ProRealTime

DAX chart Source: ProRealTime

Dow stalling amid recent rebound

The Dow Jones is in a more advanced position in this recovery, with the index having passed through the 61.8% Fibonacci resistance level.

It is also the index which looks most at risk of a bearish turn in the coming days, with the failure to create a new high meaning that a break below the 26,421-26,450 zone could set us up for a period of downside for the pair. Such a move would provide us with an intraday head and shoulders formation, pointing towards a continuation of the bearish trade seen last week.

Dow Jones chart Source: ProRealTime

Dow Jones 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.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

See opportunity on an index?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • 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 fixed spreads from 1 point on FTSE 100 and Germany 30
  • Trade more 24-hour indices than any other provider – 26 in total
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Bid
Offer
-
-
China 300
-
-

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.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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.