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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% 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. 70% 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.

FTSE 100, DAX and Dow consolidate within wider uptrend

FTSE 100, DAX and Dow retain their uptrends despite recent signs of a potential bearish picture emerging.

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FTSE 100 continues to consolidate after recent declines

The FTSE 100 has been pulling back since the Tuesday peak, when the index hit the 76.4% Fibonacci resistance level. The recent deep retracement towards the 7240 level signals a potential bearish picture coming into play.

However, we would need to see a break below 7257 and 7240 to bring about a wider bearish picture. Alternately, a break up through the prior peak and Fibonacci resistance around 7391 would start to bring about a more bullish outlook.

FTSE 100 chart Source: ProRealTime
FTSE 100 chart Source: ProRealTime

DAX continues to consolidate after trendline break

The DAX has been showing signs of a potential bearish turn of late, with the price breaking below an ascending trendline and falling back into the 13,142 support level. We have since seen a rise back into trendline resistance, with the index turning lower since.

The key here is which direction we break from this consolidation zone. A decline below 13,142 would bring a bearish phase into play, whereas a rise through 13,303 would bring about a bullish continuation signal.

DAX chart Source: ProRealTime
DAX chart Source: ProRealTime

Dow tentatively breaks into new high

Dow Jones has managed to head into a new record high overnight, with the index rising through the 27,775 high. Coming off the back of a consolidation phase, the failure to break below the 27,501 support level highlighted the continuation of the recent uptrend.

A break below that support level would point towards a possible bearish reversal. However, until that happens, there is a high likelihood of another leg higher for the Dow.

Dow Jones chart Source: ProRealTime
Dow Jones chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG Markets Ltd 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. See full non-independent research disclaimer and quarterly summary.

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