FTSE 100, DAX and Dow declines likely to be limited
FTSE 100, DAX and Dow declines could be limited as wider uptrends remain intact.
FTSE 100 turning lower once again
The FTSE 100 saw a sharp decline on yesterday’s Federal Reserve (Fed) meeting, driving the index back into the 76.4% retracement of the 7460-7729 rally.
The break below the 7548 highlighted the potential retracement of the wider move, and given the respect of that 76.4% level there is a possibility that the bulls will come back into play before long. However, with the price turning lower again this morning, it will be key to see whether the price falls below the 7524 low and Fibonacci level. From a wider perspective, a break below 7460 would be required to break from the uptrend seen throughout June and July.
DAX consolidates after sharp decline
The DAX has seen a volatile week, and even though we have seen a general lack of direction following Tuesday’s sharp decline, we are seeing significant sized moves within the subsequent consolidation.
There is a chance that this is a precursor to a short-term upward retracement, yet we need to see the price break through 12,226 to bring expectations of that upward phase.
Dow decline looks like potential retracement phase
The Dow Jones saw sharp losses yesterday, with the index falling below 27,068 range bottom.
That brings us into a wider retracement of the 26,657-27,402 rally. With that in mind, a bullish turn does look likely before long, with a break below that 26,657 swing low required to bring about a wider bearish picture. Watch for a break through the 26,907 overnight high as a signal of impending upside.
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