News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Further your stock trading knowledge and gain informed market analyses from our expert analysts @HathornSabin and @JMcQueenFX on Indexes with our free Q4 guide, available today.https://t.co/YQG1aaIT8C #Dailyfxguides https://t.co/aJViAT9lw8
  • Get your basics right. Find out what is stock market volatility and how you can trade It here:https://t.co/pK95WaqA3j https://t.co/sLMza2wKYd
  • The Japanese Yen continues to be pummeled against most major currencies. Get your weekly Japanese Yen forecast from @HathornSabin here: https://t.co/WY5rcoqNP2 https://t.co/JT8yOUgceA
  • The US Dollar paused its advance against ASEAN currencies. USD/SGD eyes a key trendline, USD/THB risks stalling, USD/PHP enters consolidation as USD/IDR continues ranging. Get your market update from @ddubrovskyFX here:https://t.co/Hd4mu0MKkp https://t.co/1kOgueJOXz
  • The economic calendar has its top listings (China GDP among them), but traders would do well to keep tabs on themes like the Fed outlook, an imminent Bitcoin record and lurking China contagion. What I'm watching for next week: https://www.dailyfx.com/forex/video/daily_news_report/2021/10/16/Dollar-Deals-with-Tight-Fed-Outlook-Bitcoin-Eyes-Record-Energy-Crisis-Worries-Continue.html https://t.co/LrlZXmF8jK
  • Crude oil and coal prices hit fresh levels overnight as supply issues threaten to worsen an already fragile energy situation. Asia is particularly susceptible after regional flooding shuttered coal mine operations. Get your market update here:https://t.co/tgIsootO7y https://t.co/2RlYVgawgf
  • The Japanese Yen has moved lower across the board and is making multi-year lows against the USD. Will it snap the range, and do the same against EUR? Get your market here:https://t.co/tQYc6cPuM0 https://t.co/YDEELagtTb
  • The British Pound has bounced off its low against USD while it’s trapped in wide ranges against the EUR and CHF. How long will GBP be tied to its Continental Europe constituents? Find out here:https://t.co/xs3EMWWIom https://t.co/aHXoGbOBKq
  • (Weekly Fundy) Australian Dollar Outlook: AUD/USD Back on the Offensive as Covid Restrictions Ease #AUD $AUDUSD #Covid https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/10/16/Australian-Dollar-Outlook-AUDUSD-Back-on-the-Offensive-as-Covid-Restrictions-Ease.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/sGSPXKQyne
  • The Australian Dollar is seemingly back on the offensive as lockdowns ease in Sydney and Melbourne. Improving sentiment may allow AUD/USD to capitalize on rising equities and commodity prices. Get your weekly $AUD forecast from @ddubrovskyFX here: https://t.co/JDhqHY9OW1 https://t.co/JyLUT4cNnF
DAX 30, FTSE 100 & CAC 40 Forecasts: How Far Will Stocks Fall?

DAX 30, FTSE 100 & CAC 40 Forecasts: How Far Will Stocks Fall?

Peter Hanks, Strategist

DAX 30, FTSE 100 & CAC 40 Price Outlook:

  • The DAX 30 broke beneath an ascending trendline and Fibonacci support
  • Similarly, the FTSE 100 pierced the lower bound of a rising channel that helped guide price higher
  • Not to be outdone, the CAC 40 is moving quickly toward a possible area of tertiary support after breaking through various Fibonacci levels

DAX 30, FTSE 100 & CAC 40 Forecasts: How Far Will Stocks Fall?

European equities showed early signs of weakness this week as sellers took control to push them beneath their recent peaks. Up until Thursday, US indices had not displayed serious signs of weakness as traders awaited the Fed rate decision. With the event risk passed, the DAX 30, FTSE 100 and CAC 40 have been joined by their US counterparts and selling has picked up pace. With accommodative central banks and governments behind them, the catalyst behind the recent retracement in developed equities is unclear, so how far will stocks fall?

Unfortunately for us as traders, it is exceedingly difficult to say. Without a clear driver, it can be argued a mere shift in sentiment is responsible for the current price action. Whatever the case may be, many analysts have long warned the fundamental conditions have become detached from current equity valuations – particularly in the United States. That being said, one of the most encouraging drivers of the most recent leg higher has been the technical landscape in my opinion.

DAX 30 Price Chart: 4 – Hour Time Frame (February – June)

DAX 30 price chart

As I stressed in my equity webinar, the consistent series of higher-highs and higher-lows across the major equity markets was a largely bullish sign. Although the fundamental drivers in the selloff are somewhat opaque, perhaps the most concerning development at this time is the damage dealt to the different technical formations.

In the case of the DAX 30, bearish price action pierced an ascending trendline and Fibonacci support around 12,447. This has opened the door to further losses, and the German equity index can now look to attack subsequent Fibonacci support around 11,592. A break beneath this area would constitute a new swing low and could increase selling pressure further.

FTSE 100 Price Chart: 4 – Hour Time Frame (March – June)

FTSE 100 price chart

Shifting focus to the FTSE 100, the destruction of an ascending channel from early April amounts to a major technical blow for the index. With the lower-bound broken and with secondary support around 6,067 pierced, technical traders may look for tertiary support around 5,885 which coincides with the bottom of a minor pullback in May.

CAC 40 Price Chart: 4 – Hour Time Frame (February – June)

CAC 40 price chart

A similar story is developing on the CAC 40. Selling pressure has moved the index from its recent peak and support has been tested. As it stands, the Fibonacci level around 4,672 may be the next level at risk.In the meantime, follow @PeterHanksFX on Twitter for updates.

Altogether, it seems the most concerning development from the recent price action is the irreversible damage dealt to the technical patterns that had been guiding price action higher over recent weeks. Thus, even if selling stalls out and bulls rejoin the fray, traders will have to negotiate these levels on a rebound higher which effectively makes any eventual recovery attempt more arduous.

--Written by Peter Hanks, Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES