Levels to watch: FTSE 100, DAX and Dow

The indices seem to be turning around, with deep retracement pointing towards the potential creation of higher lows.

FTSE 100 rebound could point towards market bottom

The FTSE 100 managed to rebound without breaking below the 6919 low last week, with the price rising above the 7169 resistance level.

The potential higher low brings about a considerable possibility that we have seen a bottom for the FTSE 100, with a rally above 7312 providing greater confidence that this is the case. For now, with the price consolidating, we need to see whether the price will retrace the Friday evening rally or simply push onwards from here. Conversely, a break below 6979 would raise the possibility of another sell-off for the index.

DAX rebounding from deep retracement

The DAX managed to post a nice deep 76.4% retracement last week, before beginning to show signs of a bullish resurgence.

With the price pushing higher from a period of consolidation, there is a good chance we could see this recovery continue to take shape from here. A break below Friday’s low of 11,910 would provide a warning sign, but until that happens, there is a strong possibility we will see the index push higher as the week progresses.

Dow heads higher as it builds on recent resurgence

The Dow Jones is similarly moving higher, as it builds off the back of a deep retracement on Friday.

In order for a more confident bullish view, the next swing high to break is at 24,956, which is followed by 25,298. Ultimately, we need to remain above Friday’s low of 23,358 to remain bullish. 

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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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