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FTSE 100, DAX and S&P 500 all pause after gains

Indices have rebounded from the lows of the week, but with the easy part of the job accomplished, it remains to be seen whether buyers can keep the bounce going.

FTSE 100 at risk of turn lower

The FTSE 100 has rallied to a new lower high, but has still failed to close the gap from the beginning of the week. With the hourly stochastics already turning lower, and hourly moving average convergence/divergence (MACD) also at risk of following suit, we may see selling pressure revive from here.

This would then bring Monday’s low at 7390 into play, with a move below this creating a new lower low and reinforcing the bearish short-term view. If bulls are to maintain forward momentum, then they need to stop this from happening. This will create a higher low relative to Monday’s base, which will then allow a fresh attempt to close the Monday gap down to take place. Ultimately, a move back above 7640 is needed to firmly entrench a bullish view here.

DAX bounce running out of steam?

Buyers have managed to drive the DAX’s price up from the low around 13,180, but now are at risk of losing control as a lower high is created.

Further selling targets 13,180 Below this, 12,900 comes into view. As with the FTSE 100, bulls need to close the gap from the beginning of the week, and in the case of the DAX this would leave the way clear to targeting 13,600 again, which was resistance last week.

S&P 500 bulls celebrate gap close

The US, as ever, remains the more bullish geographical area, and the S&P 500 has already filled the gap from Monday.

The index created a possible lower high, and the stochastics and MACD are, respectively, rolling over and about to roll over. It is now up to the buyers to create a higher low if weakness before the Federal Open Market Committee (FOMC) meeting transpires. A move back down to Monday’s low of 3240 revives the short-term bearish thesis, while further gains from here target 3335.

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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