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

The market is surging again as the Federal Reserve strikes the right tone at its latest meeting.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-03-16T09:32:51+0000

Federal Reserve chair, Janet Yellen

Source: Bloomberg

FTSE 100 hits record highs

New record highs for the FTSE this morning confirm the rally is back on. Bulls now have the difficult task of discerning whether we will get a pullback or move higher from here. First line support would be found around 7394, the previous high, but buyers should not be unduly disturbed if a bigger pullback takes us back to 7360 or 7340 – areas where buyers stepped in this week.

It would take a move below the 50-day simple moving average (SMA) at 7265 to even suggest the rally has turned. Any dip above this level should be welcomed as another buying opportunity.

FTSE chart

FTSE chart

FTSE chart

DAX presents a good entry opportunity

The DAX has stumbled at the open, falling back from highs above 12,150. As with the FTSE 100, a move back below the previous high should not be concerning since we have a powerful trend running from the February lows.

A dip towards 12,000 would be seen as an attractive entry point. From here the next areas of resistance are 12,220 and then 12,408.

DAX chart

DAX chart

DAX chart

Dow facing a pullback?

Yesterday the Dow Jones broke through the descending trendline off the March highs. The new upside target is 21,150. With the index overextended to the upside on the hourly chart, we may see a pullback but this may represent the buying opportunity for those who chose to hold their fire ahead of the FOMC meeting yesterday.

While the index may falter, as long as it holds 20,777, the short-term trend aligns with the long-term, and it seems difficult to contemplate a new sell-off unless we drop back below the 50-day SMA, currently 20,362.

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.

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. Clients can lose more than they deposit. All trading involves risk.

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