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FTSE 100, DAX and Dow start to break lower

FTSE 100, DAX, and Dow all turn lower, yet could this bring a buying opportunity?

FTSE 100 declines take index close to key support

The FTSE 100 has been falling sharply since Wednesday morning, with the break below 7550 signalling an end to the short-term recovery.

We are seeing the index approach the key 7484 support level, which would bring a wider bearish picture if broken. As such, the ability or inability to break below that level will be key in determining where we go from here.

DAX breakdown points towards potential wider bearish picture

The DAX recovery has proved short-lived, with the index selling off sharply.

A break below the 12,169 support level would break the June uptrend to instead raise expectations that we are retracing the wider 11,598-12,662 rally. A break below 12,169 would bring a bearish continuation signal, yet until that happens we could yet see a rebound which would be confirmed with a stochastic break up through 20.

Dow pullback deemed a retracement

The Dow Jones has similarly turned lower following a recent shift in sentiment, with the break below 27,288 bringing about a bearish short-term signal.

The wider bullish trend remains in play, and this pullback is likely to provide us with a buying opportunity before long. A deeper Fibonacci retracement would bring such a buying opportunity, and thus it makes sense to await further downside. Alternately, watch the shorter-term intraday charts for bullish reversal signals within this downturn.

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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