CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Levels to watch: FTSE 100, DAX and Dow

European and US indices continue to weaken, yet with the recent uptrend remaining intact, there is reason to believe we will see a bullish reversal in the near future.

IG Analyst

Publication date : 2018-08-02T09:13:12+0100

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FTSE 100 breakdown brings wider range into play

Yesterday’s sharp sell-off brought about a drop below trendline support, with the FTSE 100 hitting the lowest level seen in over two weeks.

This brings about a focus on the wider range, which utilises the 7553 as the low. A break below that level would point towards a greater potential of a strong sell-off. However, until that happens, it makes sense to look for Fibonacci support in the near term, with the price currently approaching the 76.4% level at 7595.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX pulls back towards 76.4% retracement

The DAX is also selling off sharply, with the price breaking below the 61.8% Fibonacci support level this morning.

The uptrend seen throughout the past month would be negated with a break below 12,464. However, until that happens, there is reason to believe we could see the index turn higher from the 76.4% retracement in the near future.

DAX chart

DAX chart

DAX chart

Dow pulls back, yet uptrend remains

The Dow Jones is similarly weakening, with the price dropping towards the 61.8% retracement this morning.

Crucially, this uptrend remains in play unless we see a break below the 24,927 mark. Until then, long positions look attractive on Fibonacci support.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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