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Levels to watch: FTSE 100, DAX and Dow

The European indices look likely to reverse lower, despite overnight gains. Meanwhile, the Dow is leading the way, with the US index hitting record highs.

IG Analyst

Publication date : 2018-10-03T09:40:57+0100

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FTSE 100 turning lower after recent ascent

The FTSE 100 is turning lower again, following a rally into the 7502 resistance level overnight.

The fact that we saw a fall into the 7446 area negates the creation of higher lows and points towards a potential bearish reversal from here. Given the rally into the 76.4% resistance, this bearish potential carries greater weight. With that in mind, there is a strong chance we will turn lower, with a rally above 7558 required to resume the recent uptrend.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX consolidates after Fibonacci sell-off

The DAX managed to reverse sharply lower from both trendline and Fibonacci resistance on Friday, with the index looking to resume the wider downtrend that has been in play over recent months.

The consolidation we are currently seeing looks likely to be a short-term phase before we turn lower once again. A rally up through the 12,500 mark would negate that bearish outlook.

DAX chart

DAX chart

DAX chart

Dow rallies into record high

The Dow Jones has managed to rally through the 26,781 record high, with the index pushing into fresh territory.

The market is likely to continue driving higher as we go forward, with retracements looking like buying opportunities unless we see a break below 26,332 support.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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