Levels to watch: FTSE 100, DAX and Dow

A mixed outlook points to a non-cohesive market sentiment across the board, with a bearish FTSE 100 breakdown coming amid a rebound for the DAX and Dow.

FTSE 100 breaking lower from rising wedge

The FTSE 100 is turning lower at the open this morning, with the overnight rise forming a bearish rising wedge formation.

That points towards a likely continuation of the recent losses, with a strong possibility that the index will return to the lower end of the range in play over the past two months. With that in mind, watch for a potential downward extension, with 7614 the next support level of note. A break above 7673 would be required to negate this short-term bearish outlook.

DAX rebounding from confluence of support

The DAX is rebounding from a key confluence of support, with the price rising after moving within touching distance of trendline and 76.4% Fibonacci support yesterday.

This comes off the back of a sharp sell-off following the completion of a head and shoulders pattern. Given the shallow nature of this rebound, there is a good chance we will see further upside for the near term, even if we are looking at a retracement.

Dow attempting to regain ground after recent decline

The Dow Jones is moving higher following a strong sell-off over the past week.

Crucially we have not broken the 25,114 level, below which we would be looking at a wider bearish shift for the index. Until that happens, there is a good chance we could turn higher from here, with an hourly close above 25,378 pointing towards a period of upside. Conversely, an hourly close below 25,114 would signal a likely breakdown from here.

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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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