FTSE 100, DAX and Dow rally after Fed intervention
FTSE 100, DAX and Dow rebound on the action from the Federal Reserve, with the indices heading back towards Fibonacci resistance levels.
FTSE 100 rebounds back through key resistance level
The FTSE 100 received a boost from the Federal Reserve (Fed) yesterday, with the break through 6186 bringing about a more bullish outlook after recent declines.
The recent selloff took us into and below the 61.8% Fibonacci support level last week, yet we are starting to now see the wider bullish trend coming back into play once again. The big question here is whether we continue to rebound and ultimately regain the 6515 level. That remains to be seen, with markets likely to continue following the direction of coronavirus cases as a gauge of whether a second wave is impending. For today, we are finding support from the breakout level of 6186. The ability to remain above that level would point towards further gains, whereas a breakdown below the 80 threshold on the four-hour chart could bring another bout of downside.
DAX rebounds after Fed action
The DAX has similarly surged after the Fed provided further supportive actions for the markets, raising risk sentiment.
The break through 12,172 brings an end to the recent trend of lower highs, with price now finding support on that level. Once again, we could see a pullback if the stochastic falls back out of overbought territory. However, the big question is whether this is really the end of the selloff, or if this is simply a retracement of the wider declines. The most obvious way to find that out would be a break through the 12,938. Until then, the reaction to Fibonacci resistance levels at 12,321 and 12,619 will provide information as to whether we are currently in a retracement or recovery mode or not.
Dow Jones easing back after recent gains
The Fed-inspired Dow rally has taken us back through Friday's peak of 25,959, with the index attempting to regain lost ground.
Again, we do not know whether this is a retracement of the wider decline from 27,633, with second wave fears having the potential to resurface before long. Up above, watch out for how we respond to the 61.8% and 76.4% Fibonacci resistance levels if they are reached. Once again, a break below the stochastic 80 threshold could provide a signal that the index is set to move lower.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
