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.

Levels to watch: FTSE 100, DAX and Dow

US markets are expected to lead the way higher once more, with European markets looking likely to weaken if key levels are broken.

FTSE 100 reverses into crucial breakdown level

The FTSE 100 has turned lower yet again following a rally into the 76.4% region. The 7445 low that has so far capped today’s downside is going to be absolutely crucial for the ongoing outlook.

A break below that level, which coincides with the 200-day simple moving average (SMA), would complete a head and shoulders formation for the index, bringing further downside. As such, watch for a break below 7445 for a bearish outlook, while a rally through the recent 7530 peak would bring about a more bullish short-term view.

DAX breaking lower from consolidation phase

The DAX is similarly attempting to break lower following a phase of consolidation amid yesterday’s German bank holiday.

The 12,201 level is crucial as a breakdown point, with the current attempt to break lower pointing towards a possible sell-off from here. Until then, we remain within consolidation mode.

Dow pullback to bring buying opportunity

The Dow Jones has been drifting lower, following on from the record highs seen yesterday. This is likely to simply provide us with a better buying opportunity, with a break below 26,332 required to negate the wider uptrend. The choice of swing low for your Fibonacci can be difficult on this one.

Therefore, while there is a possibility of utilising the 26,538 level to base your stop loss on, the fact is that 26,332 is ultimately the key level that must be broken to negate this bullish outlook.

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

Find articles by writer

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.