Levels to watch: FTSE 100, DAX and Dow

Recent uptrends remain intact for European and US indices. However, with the Dow breaking lower from a rising wedge, there is a chance we could begin seeing a retracement come into play.

FTSE 100 uptrend remains in play

The FTSE 100 has been moving higher for over a month now, and with the price consolidating yesterday, there is a strong chance we will see a surge higher before long.

With ascending trendlines capping both the top and bottom of recent price action, it is likely we will see a move back into the top end of this wedge once more this week. A break below 7543 would be required to negate this bullish outlook.

DAX at key support after hitting trendline resistance

The DAX has been consolidating after hitting trendline resistance on Friday morning, with the price falling back into the 12,927 low from Thursday.

A break below that level would point towards a potential move back towards trendline support, which would also likely coincide with the 12,853 low. As such, watch for the reaction to 12,927 as a potential signal of whether this pullback will go any further.

Dow falls out of wedge formation

The Dow Jones has dropped below trendline support, following on from a rally through 24,860 resistance. This could be the beginning of a wider pullback, although we have not seen any confirmation yet.

For that confirmation to come about, we would need to see an hourly close below 24,713. Until then there is a good chance we will see the uptrend continue, albeit at a slower pace.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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