CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% 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. 70% 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 Dow

Weakness across both European and US indices this morning looks to provide a buying opportunity with strong risk-to-reward properties.

anonymous

Publication date : 2017-06-27T10:03:37+0100

German stock exchange

Source: Bloomberg

FTSE pullback looks to provide bullish outcome

The FTSE has been drifting lower this morning, with the price falling into the 76.4% retracement. We have been seeing signs of a resurgence for the market over recent days and, as such, the current pullback could be another deep retracement before we move higher once more.

With that in mind, as long as the price does not break below 7397, then further gains seem likely to be around the corner.

FTSE price chart

FTSE price chart

FTSE price chart

Deep DAX retracement could bring bullish reversal

The DAX has similarly pulled back to the 76.4% retracement, coming off the back of a bullish break through 12,807 yesterday. Give the wider uptrend, and yesterday’s move higher, there is reason to believe we will push higher from here.

Given that a break higher would not only look for 12,841, but also 12,952 for a continuation of this trend, we could be looking at a near five-to-one risk-to-reward profile here. With that in mind, longs are preferred, with a break below 12,674 required to negate this bullish view.

DAX chart

DAX chart

DAX chart

Dow falling back after sharp rally

The Dow Jones is similarly pulling back this morning, but we have not seen the same kind of retracement yet. Yesterday looked like a clear bullish breakout in the direction of the prevailing trend, and thus this current weakness looks like a good buying opportunity rather than something to worry about.

As such, longs are preferred unless we break below 21,330. Given that trendline support is currently below the 76.4% level (21,371), there is reason to believe we could get another move lower into that Fib before the market turns higher once more.

Dow Jones chart

Dow Jones chart

Dow Jones 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. 70% 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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