FTSE 100, DAX and Dow breaks key support after Iran retaliation
FTSE 100, DAX and Dow break key support, pointing to further downside coming into play before long.
FTSE 100 breaks below key support
The FTSE 100 managed to break below the 7525 level overnight, with an Iranian attack on two US air bases sparking a risk-off move.
We have since seen a rise as the US response looks to be more moderate than many had speculated. Crucially, the decline below that support level does appear to complete the recent topping pattern, pointing towards another leg lower from here. With that in mind, another decline looks likely before long, with a break through 7636 required to negate this bearish short-term outlook.
DAX rallies into Fibonacci resistance
The DAX has similarly seen a sharp decline followed by an overnight surge, with the index now starting to show signs of weakness.
Yesterday's peak came around the 61.8% Fibonacci retracement, and we are now seeing a different 61.8% Fibonacci level respected around 13,164. As such, further downside looks likely from here, with a break through 13,284 required to negate the current bearish outlook.
Dow breaks below key support
The Dow Jones has seen sharp declines overnight in response to the Iranian attack, with the index dropping below trendline and 28,367 support.
That brings the recent short-term uptrend to a close, with the index now looking to be in retracement mode for the wider 27,322-28,958 rally. As such, further downside looks likely, with the current rebound looking likely to be short term in nature unless we see a break through the 28,770.
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