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Levels to watch: FTSE 100, DAX and Dow

US markets lead the way, with the Dow heading towards record high territory. Meanwhile, both the FTSE 100 and DAX have managed to rally into Fibonacci resistance levels.

IG Analyst

Publication date : 2018-08-28T09:39:18+0100

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FTSE 100 regaining ground

The FTSE 100 has managed to break into the highest level in almost two weeks, as the wider bullish sentiment in the market helps push UK stocks higher.

The near-term resistance level comes in at 7673, with the 200-day simple moving average (SMA) also worth watching out for. Ultimately, this could be a retracement of the 7791-7458 drop, given the fall below 7489 recently. Thus, watch for a potential rally into the 61.8% or 76.4% level as near-term targets.

FTSE 100 price chart

FTSE 100 price chart

FTSE 100 price chart

DAX rallies into Fibonacci resistance

The DAX has managed to rally into the 61.8% Fibonacci resistance level, following on from a drop into the 12,102 support level. That inability to break into a new low doesn’t give us a particularly strong signal in either direction.

Thus, the ability to break above the 61.8% and 76.4% Fibonacci levels will tell us a lot about whether we can continue this current rally or not. Should we see the DAX respond to those levels, then that would be a signal that we are possibly seeing a retracement before we sell-off once more.

DAX price chart

DAX price chart

DAX price chart

Dow pushes higher thanks to Mexico deal

News of a trade deal between the US and Mexico has seen the Dow Jones break into a six-month high. We are likely to see further upside, with a push into record highs expected in the near future.

However, we are also likely to see a retracement before long, so it looks sensible to buy into retracements or continuation pattern breakouts, with a move below 25,606 required to negate this current uptrend.

Dow Jones price chart

Dow Jones price chart

Dow Jones price chart

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