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

Global indices look exposed as recent declines take us towards crucial levels of support. Should they break, we could be heading for another round of heavy selling.

FTSE 100 declines towards critical support level

The FTSE 100 has continued its recent decline, with the index heading towards the crucial 7268 support level. The recent rally fell short below the 61.8% and 200-day simple moving average (SMA) confluence of resistance, with the price failing on three occasions around the 7371 level. That failure to create new highs points towards the bearish picture potential re-emerging.

From a wider perspective, the break below 7145 signalled that we are likely to be looking at an upwards retracement before we turn lower once more. Given that a double top would come with a break below 7268, watch for whether we can break that support level to bring about a picture of further losses. Bear in mind that such declines would be likely to take us towards the 7145 region, below which we would complete a head and shoulders formation on the daily time frame.

DAX breaking lower after volatile week

The DAX is similarly turning lower, with the index moving within touching distance of the key 11,991 support level.

A break below that swing low would carry bearish consequences, confirming the recent 12,214 peak as a lower high, while also providing a lower low. Given the recent rally came into the wider 76.4% retracement at 12,310, it looks like we are seeing that wider bearish picture take hold once more, with a break back towards 11,814 likely if 11,991 is taken out.

Dow bulls looking exposed as we approach key support

The Dow Jones has also broken towards a key support level this morning, with the price moving towards the 25,556 low from Monday.

With the recent recovery failing to move higher than the 25,957, it looks likely we will see the index tumble further should this support level be overcome. As such, forthcoming price action will be significantly impacted by the reaction to this 25,556 low.

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.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.