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Levels to watch: FTSE 100, DAX and Dow

The FTSE 100, DAX and Dow are all in decline this morning, following on from yesterday’s FOMC meeting. However, will this provide a buying opportunity?

IG Analyst

Publication date : 2018-09-27T09:33:05+0100

DAX

Source: Bloomberg

FTSE 100 breaks below trendline support

The FTSE 100 has been trading largely sideways, following on from a surge higher on Tuesday.

This points towards a potential move into the 76.4% resistance before long (7545). The uptrend in place over the past fortnight remains in play unless we see a break below the 7445 level. The wider bearish picture remains relevant, raising the possibility of a potential reversal lower before long. However, a break below 7445 would reverse that short-term trend.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX reverses from 76.4% resistance

The DAX has been turning lower from the 76.4% retracement level at 12,427.

The wider downtrend points towards a potential break back below the lows of 11,866, with another period of weakness looking possible from here on in. A break above the 12,419 swing high would largely negate this bearish outlook, raising the likeliness of a rally through trendline resistance.

DAX chart

DAX chart

DAX chart

Dow pullback could provide buying opportunity

The Dow Jones has also been selling off sharply, following on from yesterday’s Federal Open Market Committee (FOMC) meeting.

We are likely to be in a retracement mode, with the bulls expected to return before long. Utilising both the 25,954 and 25,749 swing lows to draw our Fibonacci retracements, we can see that the 61.8% and 76.4% levels coincide around 26,143-26,149. With the late August swing high of 26,168 also coming into play at that area, any drop into there could provide a very strong buying opportunity. Until then, further downside looks likely for the index.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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