FTSE 100, DAX and Dow break down through key support levels
FTSE 100, DAX and Dow are on the slide, with the potential for a wider pullback in play after declines through key support levels.
FTSE 100 breaks back down below 7240 support
The FTSE 100 has seen heightened volatility of late, with a bullish push through 7389 being followed up with a bearish break back down below 7240. That support level represents the neckline on a head and shoulders formation, signaling the potential for a breakdown from here.
The textbook method to generate a target from such a pattern points toward a possible decline into 7049. However, it also makes sense to look at the 61.8%-76.4% Fibonacci zone (7167-7104) as a potential target zone if we are to ultimately trend higher. Thus, further downside looks likely before long, with a rise back through the 7277 level required to take some of the bearish pressure off the market.
DAX breaks below key support
The DAX has similarly provided markets with contrasting signals, after yesterday's rally through 13,303 proved to be a false dawn.
Instead, we have since seen the price drop below the 13,142 level to bring about a more bearish outlook for the index. From here there is a good chance that we begin to retrace some of the upside seen throughout much of October. As such, further downside seems likely, with a rise through the 13,183 level required to bring some calm to this market.
Dow declines into confluence of trendline support
The Dow Jones has similarly been on the slide, with the price having lost ground since Tuesday’s peak.
However, we have since seen the price fall into a confluence of two ascending trendlines, pointing towards the possibility that the bullish case may not be over quite yet. As such, watch for how this market responds to this support zone, with a break below 27,672 bringing about a more confident bearish reversal signal.
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.
