Levels to watch: FTSE, DAX and Dow

Both European and US markets continue to move lower, but could this provide us with a better buying opportunity?

German stock exchange
Source: Bloomberg

FTSE uptrend coming back into play

The FTSE is showing signs of resurgence this morning, with the price breaking above the 7365 level following a failure to break below the 7338 low (and 38.2% retracement).

This points toward the potential for this current move lower to provide a buying opportunity for the index. Thus, look out for a move into the 7346-7348 (70%-76.4%) support zone as a potential area for longs. 

DAX at key support convergence

The DAX has been consolidating over the past 24 hours, with the price selling off into a key support zone this morning. The confluence of the 200-hour simple moving average, alongside a 50% retracement and ascending trendline points toward the potential for a bounce here.

Certainly, a break back below 11,919 would point to the potential for further losses. However, this could be an interesting area for the index to turn higher, with 12,203 and 12,057 the key resistance levels ahead.

Dow downside provides buying opportunity

Dow Jones has similarly consolidated overnight, with the index retracing a significant portion of last week’s rally.

Crucially, we could see another leg lower, which would simply serve to provide a better area to get long, with the 20,869-20,894 area of particular interest. But as long as we do not break back below 20,775, another break higher seems to be the likeliest outcome.

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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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