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 100, DAX and Dow

Recent declines through European indices are likely to persist, despite short-term upside in early trade. Meanwhile, the Dow is looking likely to rebound from a key zone, yet will it be enough to shift away from the rampant selling of last week?

anonymous

Publication date : 2018-12-10T09:40:53+0000

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FTSE 100 rebound could be short-lived

The FTSE 100 managed to break below the critical 6841 support level last week, bringing about a heightened chance of a longer term and wider sell-off for the index.

While we saw a rebound on Friday, the subsequent fall through 6740 on Friday evening points towards a resumption of that bearish trend. With that in mind, this current rebound is likely to fall short of Friday’s peak of 6869. As such, this rally is likely to be short-term, with gains seen as a selling opportunity as long as we remain below 6869.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX sell-off likely to persist

The DAX is back in the red as we start off a new week, with investors and traders alike continuing to take a more risk-averse approach.

The completion of a head and shoulders (H&S) formation on the weekly timeframe did help provide a bearish outlook, with the recent losses on the hourly chart providing evidence of that H&S fallout. While we are seeing a little buying in recent hours, we are likely to see the sellers come back in once more before long. As such, watch for a bearish picture to dominate as long as price remains below 10,949.

DAX chart

DAX chart

DAX chart

Dow tumbles into crucial support zone

The Dow Jones has been falling sharply over the past week, bringing us back into a crucial support zone between the October low of 24,120 and November low of 24,243. A break below that area would point towards a possible wider period of downside coming into play. With the index beginning to regain ground off the back of a sharp deterioration on Friday, there is a good chance of some upside for the time being.

However, the key signal will come with a break below 24,120 or above 25,095.

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.

IG is a trading name of IG Markets Ltd and IG Markets South Africa Limited. 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 order to utilise their foreign investment allowance should the South African resident wish to open an offshore account with IG Markets Limited.

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