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FTSE 100, DAX and Dow soar after Fed and Gilead news

FTSE 100, DAX and Dow drive higher on Gilead and Fed announcements, but will this last?

FTSE 100 soars amid risk-on sentiment

The FTSE 100 managed to soar higher yesterday, with a seemingly unlimited quantitative easing (QE) outlook from the Federal Reserve (Fed) being building on a positive Gilead trial result. The rally through 5944 on Tuesday pointed towards further upside and a continuation of the wider bullish trend.

Certainly, the underlying economics behind this rally make very little sense, yet traders are willing to forego any reality to instead focus on the stimulative efforts both home and abroad. Given the strength of yesterday's move, there is a chance we could pull back to form a retracement, yet we will ultimately need to break below the 5717 level to negate this bullish trend that has been proven once more.

DAX breaks higher, with ECB up ahead

The DAX also received a welcome Federal Open Market Committee (FOMC) boost, with the index hitting the highest level since early-March. That sharp recovery seen overnight could continue if the European Central Bank (ECB) look to copy the Fed playbook.

The bullish trend clearly comes back into play following a break through the 10,825 resistance level, with any pullback initially looking towards trendline support. A bullish trend is evidently in play, with a break through the 10,262 required to negate this bullish view.

Dow Jones boosted by Fed once more

The Dow Jones has similarly enjoyed a bullish push higher in yesterday's bumper rally, with the index breaking through 24,447 to bring about a fresh April high. This points towards a continuation of the uptrend seen over the past month, with the bearish signal that came with a break below 23,089 now negated.

As things normalise somewhat, we could ease back. However, as long as we remain above the 24,011 level, the short-term uptrend will remain intact. Should we break below that level, there is a possibility we start to establish a retracement of the wider rally from 22,940.

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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