Levels to watch: FTSE 100, DAX and Dow

Overnight gains across the indices are now slowing, with the potential for short-term downside.

FTSE 100 hits key resistance after breakout

The FTSE 100 has managed to continue its ascent overnight, with the price rallying upwards after yet another intraday higher low. This would ordinarily have a stronger follow through.

However, given the existence of a crucial resistance level at 7256, we have seen the rally peter out at that point, with the price subsequently turning lower. We would need to see an hourly close above 7256 to point towards a bullish breakout on the medium term. Conversely, an hourly close below 7167 would point towards a bearish shift from here.

DAX spikes higher into trendline resistance

The DAX managed to push higher yesterday, as the price moved into trendline resistance once more. We are seeing some consolidation around that area, which points towards the potential for a pullback in the short term. Any such downturn would need to break below 12,201 to provide a more bearish outlook.

While there is a good chance we will see another leg higher before long, a greater confidence that the worst is over would only come with a break up through 12,477 resistance.

Dow regaining ground amid bottoming out pattern

The Dow Jones has been regaining ground of late, with higher highs and higher lows providing the basis for a more bullish phase going forward.

With the index having retraced towards the 76.4% Fibonacci level, there is a chance we will see further upside from here, with a break above 24,637 pointing towards greater confidence of a bottom. A break below 23,742 would lessen the confidence of further upside. 

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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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