Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 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 financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE, DAX and Dow

European indices look likely to leapfrog their US counterparts, with a bullish outlook for the FTSE 100 and DAX coming despite a weaker outlook for the Dow Jones.

US traders
Source: Bloomberg

FTSE continues to gain

The FTSE 100 has shrugged off losses in the US, with the index pushing to a new high once more yesterday. Despite the pullback we have seen overnight, it looks likely that we will see the index rally once more.

An hourly close above 7330 would signify a breakout, which would be expected to bring further gains. As long as we do not see a break back below 7264, then further upside seems the likeliest option from here.

FTSE 100

DAX bouncing after deep retracement

The DAX managed to retrace into the 70% pullback at 11,490 yesterday, with price rising in the aftermath. While there is no guarantee that this is the end of the weakness, any pullback into the 11,471-11,490 zone represents value for longs.

If we do not see a break back below 11,401, then the price action over the past ten days seems like a retracement of the rally from 11,401 to 11,696.

DAX

Could Dow rally be short-lived?

The Dow Jones has been turning over this week, with higher highs turning into lower lows. That portrays the current rally as a likely short-term period of strength, which is expected to spark another leg to the downside.

We would need to break back above 19,977 to negate this view. The wider picture portrays a potential double top in the making, with a break back below 19,720 required for that to come into play. For now, it looks likely we will see price follow on from recent reversal signals, with a bearish view confounding the bullish outlook in Europe.

Dow Jones

This information has been prepared by IG, a trading name of IG 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. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Find articles by writer