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Levels to watch: FTSE 100, DAX and S&P 500

European markets have continued to try and maintain their rallies, while a push higher yesterday by the S&P 500 has run out of steam ahead of the FOMC meeting.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2018-09-26T10:13:47+0100

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FTSE 100 tries to breach 7500

The FTSE 100 is once again testing the area of resistance around 7500, as it did at the end of August. This zone proved problematic a month ago, and a failure to post a daily close above 7500 would be regarded as potentially bearish in the short term, creating a lower high.

A close above 7500 could open the way to 7644, the late August high. Below 7490, the chances of a leg lower towards the September lows increases.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX stuck fast below 12,400

For the three sessions so far this week, the DAX has failed to clear the 12,400 zone. Dips to a low of 12,330 have however found buyers, so a break out from this circa 70 point range is needed to establish the direction of the next move.

A drop below 12,300 would suggest a bigger fall towards 12,100. A close above 12,400 would be a first step towards indicating a rally, although it would still need a push above Friday’s high at 12,461. Above here the 12,500 zone comes into play, and a clearance of that would begin to suggest that the downtrend in place since January is beginning to come to an end.

DAX price chart

DAX price chart

DAX price chart

S&P 500 rally stopped in its tracks

Yesterday saw the S&P 500 attempt to close the weekend gap, but it was unable to hold the highs and has continued to edge lower.

For the time being, this is not a pullback, and looks more like a digestion of the recent move higher, plus some pre-Federal Reserve (Fed) hesitation. A move below 2910 would open the way to test the 2875 area.

S&P 500 price chart

S&P 500 price chart

S&P 500 price 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.

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