Levels to watch: FTSE 100, DAX and Dow
European and US markets are on the rise following yesterday’s sharp sell-off. However, with the downtrend still in play, this rebound could simply provide a shorting opportunity.
FTSE 100 heading lower amid consolidation phase
The FTSE 100 is weakening once more after a period of stability that has taken hold in the early hours of the morning.
The fall below the 6788 support paved the way for a further downside that has taken shape throughout yesterday. This sell-off is likely to persist, with a rally back up through the 6853 level required to negate the bearish outlook. Watch out for a closed candle below the 6717 level to signal a likely next leg lower.
DAX regaining ground after recent decline
The DAX is rising into a crucial resistance level this morning, with the index consolidating after a sharp decline yesterday.
There is a good chance that we will provide some form of a deeper retracement if we break above the 10,779 swing high. However, such a move would be perceived as a precursor to further downside unless we break through the 10,918 mark. As such, watch for whether we break the 10,779 level, with a rise towards the 61.8% and 76.4% Fibonacci retracement zone looking likely if that level is broken. Until then, there is a chance of us turning lower once again amid this recent consolidation phase.
Dow Jones rebound unlikely to last
The Dow Jones is similarly regaining ground after yesterday’s declines. This does not necessarily mean that we are going to see the upside persist, with a rally into the 61.8% region looking likely in an ABC retracement style.
A break through the 24,088 mark would largely negate that bearish short-term view, yet until that happens, this current period of upside is likely to provide a shorting opportunity.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. 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 an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
