FTSE, DAX and Dow drift lower ahead of key US CPI release
The FTSE, DAX, and Dow start to weaken, yet we await a break through key support to confirm bearish reversal signals.
FTSE 100 rolling over from deep retracement
The FTSE 100 has started to weaken this week, following a period of gains that have taken the index up into a fresh two-month high.
The ability to maintain this uptrend and push through the prior peaks of 7647-7690 is questionable as it would also bring record highs. Thus, the depth of this rally so far highlights how we could soon see the index roll over and start to head lower before long.
The declines we have seen thus far this week have brought the index back into trendline support. A break below that line would provide an initial warning sign that a bearish phase could be impending.
However, it would ultimately take a move back below 7370 swing-low support to bring greater confidence of that bearish reversal coming into play. Until then, this intraday uptrend remains the dominant short-term pattern to follow.
DAX rolls over, raising the chance of a bearish reversal
The DAX has been on the back foot this week, with the index falling back below the 13572 level and moving progressively closer to the key 13339 support level.
While the wider downtrend does mean that there is a good chance we could be looking at a top here, we are yet to negate the short-term pattern of higher highs and lows. Thus, this pullback could yet find support on the 76.4% Fibonacci level at 13442.
As such, watch out for a potential rebound from that level, with a break below 13442 and crucially 13339 bringing the bears back into play for the DAX.
The Dow consolidating within deep retracement
The Dow has struggled to push higher this week, with traders all looking towards this afternoon's US consumer price inflation (CPI) reading as a driver of sentiment going forward.
The ability to break out from the wider bearish trend is going to be key for this market, with price pushing upwards towards the 33461 swing-high of late.
The long-term trend seen on the daily chart means there is a distinct risk of a bearish turn for the index to continue that pattern. Thus far we are yet to see that reversal signal, with a move below 32381 providing one notable bearish reversal signal if it takes hold.
Without such a move, this intraday uptrend continues to remain the dominant short-term move to follow.
The information 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 Bank S.A. 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 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.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
