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

Yesterday’s weakness appears to be fading today, with European markets gaining ground in particular. Could this be the beginning of the next move higher?

anonymous

Publication date : 2017-09-05T09:37:58+0100

Trading floor

Source: Bloomberg

FTSE 100 regaining lost ground

The FTSE 100 has been gradually making up the lost ground following the gap lower at the open yesterday. Given the break through 7446 last week, it seems likely that we will see further gains before long. However, there is a good chance that, given the strong move higher last week, we could see the index come off further before moving back into the bullish mindset.

With that in mind, an hourly close above 7460 would provide a renewed bullish outlook. Until then, short-term losses remain a strong possibility due to the wide swings seen in recent weeks.

FTSE 100

FTSE 100 chart

FTSE 100

DAX rallying back into resistance zone

The DAX is pushing higher once more this morning, as the index recovers from yesterday’s sell-off. Crucially, we have a clear bearish pattern over the longer term, with lower highs set throughout August. Given last week’s rally and turn lower from the 76.4% retracement, it will be key to see whether the price breaks through 12,193 or not. Inability to do so would highlight the potential for the market to weaken heavily once more.

A break through 12,193 would subsequently look towards trendline resistance as the next hurdle. We would need to see a break through 12,276 to negate the wider bearish trend.

DAX chart

DAX chart

DAX chart

Dow holding out above key support level

The Dow Jones is marginally gaining ground from the 21,914 support level this morning, following the breakout through this level last week. That 21,914 area is going to be crucial today, with an hourly close below that level pointing towards a likely continuation of the weakness we have seen yesterday.

Whether that move comes to fruition or not, last week’s bullish breakout means that we are likely to see a short-term retracement before we move higher once more.

Dow price chart

Dow chart

Dow price 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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