CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE, DAX and Dow

After a Yellen-fueled blockbuster day, yesterday, we have a good chance of seeing some weakness come into play for the European indices.

anonymous

Publication date : 2017-07-13T09:44:08+0100

Trading floor

Source: Bloomberg

FTSE consolidating after sharp rally

The FTSE managed to break out from its range in style yesterday, with the index gaining after dovish comments from Janet Yellen. We are seeing consolidation this morning, with the price breaking sideways from a symmetrical triangle.

Ultimately, we are looking for a break from the 7409-7434 zone to provide a directional bias from here. Given the fact that we have not seen the index break through the first swing high of 7453, we could still be looking at a retracement of the late June sell-off. Hence it is no surprise that we are seeing some selling come into play here.

As such, watch out for a break through 7453 as a strong bullish signal. Until then, it looks likely we will see some selling come into play today.

FTSE chart

FTSE chart

FTSE chart

Will DAX pullback last?

The DAX is also starting to weaken off the back of yesterday’s blockbuster rally. We have seen the index move into the 76.4% retracement region, which highlights the fact that we could yet be seeing another retracement rally before we sell off once more.

For that idea to be negated, we would need to see a break up through the 12,735 resistance level. Until then, there is a chance of some weakness coming back into play. Watch the rising wedge in the stochastic oscillator for a potential sell signal.

DAX chart

DAX chart

DAX chart

Dow turns higher towards trendline once more

The Dow Jones rallied into trendline resistance yesterday, reaching a new all-time high in the process. This new higher high paves the way for further potential gains, with an hourly close above the trendline providing a strong buy signal.

Above there we have zero resistance of note, providing room for a potential strong leg higher. However, until we break through this resistance level, there is always a chance of a retracement, especially given the potential for a similar move in the European markets.

Dow Jones chart

Dow Jones chart

Dow Jones chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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