FTSE 100, DAX and Dow on the slide
The FTSE 100, DAX and Dow all head lower, but will it be a retracement or a reversal?
FTSE 100 slides below key support
The FTSE 100 has been dropping sharply since Monday’s peak, with the index breaking below the 7594 support level. That points towards a wider selloff emerging, with the next key support level approaching at 7557.
This wider selloff could come into play to maintain a symmetrical triangle pattern that has been playing out over the months. However, we would need to see a break below 7473 to confirm such a selloff. Until then, watch out for how we respond to this support level.
DAX reversing after rally into trendline resistance
The DAX is also turning lower after a recent rally into resistance. That trendline looks to have capped upside for the time being, with the price heading back into Fibonacci support.
A break below the 13361 support level would bring about a wider bearish picture. However, we need to see whether the index breaks or respects these Fibonacci levels in the meanwhile to determine whether we are looking at a retracement or reversal.
Dow pullback likely to be fleeting
The Dow Jones is also on the slide, yet to a lesser degree. The outperformance of US markets should ensure that this pullback is relatively short term in nature.
As such, watch for further downside, yet it will likely provide us with a retracement and buying opportunity rather than a wider reversal signal.
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