CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE, DAX and CAC

US markets are out of the picture today for Presidents Day, so we can expect lighter volumes during the session, as buyers look to continue Friday’s bounce.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-02-20T08:28:12+0000

Trader reflected in digital data board

Source: Bloomberg

FTSE 100 may challenge all-time highs again

Friday’s bounce in risk appetite proved there is life in the current rally yet, with moves higher across major indices restoring the bullish outlook. In the UK, Kraft’s (now abandoned) bid for Unilever helped to add around 13 points to the index. Early on in the session today we have seen the price start to nudge through last Wednesday’s high around 7315, so if this continues the run at the all-time high at 7360 is back on.

The uptrend off the February low held, with the price dipping towards, but not actually testing, the trendline. Bears need to get the price back below 7260, which has acted as very strong support on the hourly chart over the past week.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX bulls to target last week’s high

Having looked slightly unwell on Thursday, the risk rally rebounded here too. However, unlike the FTSE 100 the DAX failed to break the high of last week (11,850), so this is the first job for bulls. A move above here targets the late January high at 11,900.

Dip buyers may want to wait for another drop, perhaps down to the 11,720 support line. Sustained activity below this would be needed to suggest a new downward move is beginning.

DAX price chart

DAX price chart

DAX price chart

CAC rallies

The divergence between the DAX and CAC due to the uncertainties caused by the French election were clearly seen last week. Although the French index rallied off its lows, and posted an impressive textbook bounce off the 200-hour simple moving average (4857), it is still far away from last week’s high around 4940.

The areas to watch for further strength are 4920 and 4940. Above here, 5000/5020 becomes the area for look out for potential resistance, marking the November 2015 highs.

CAC price chart

CAC price chart

CAC price chart

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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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

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