DAX 30 & FTSE 100 Analysis and News
A further deterioration in risk sentiment as equity markets reprice a global recession. The spread of the coronavirus continues to keep equities on the backfoot and with many countries going into lockdown, volatility will remain elevated.
DAX 30 | Risks Skewed to the Downside
Another sizeable weekly drop in the DAX with much of the downside exacerbated upon the break below the 2019 low (10173). Despite a modest reprieve in the index at the back end of the week, we expect bounces to prove short-lived and this see risks remain firmly skewed to the downside. As such, eyes are for a retest of the 2016 low situated at 8696, where failure to hold could see losses extend to 8350 (October 2014 low). Keep in mind that with volatility remaining elevated, the DAX will be subject to wild swings.
| Change in | Longs | Shorts | OI |
| Daily | -1% | 0% | 0% |
| Weekly | -8% | -8% | -8% |
DAX 30 Price Chart: Weekly Time Frame
Chart by IG
FTSE 100 | Another Look Below 5000
The Bank of England delivered yet another emergency rate cut to a fresh record low of 0.1%, while also increasing its QE program in order to combat the coronavirus. While the announced prompted a modest lift in UK assets, typically an emergency rate cut from the BoE does not bode well for the FTSE 100, as such, we see risks of another move sub 5000 with London set to go into shutdown.
Source: FTSE 100 Performance from Bank of England Rate Cuts
| Change in | Longs | Shorts | OI |
| Daily | 0% | 1% | 0% |
| Weekly | 21% | -27% | -10% |
FTSE 100 Price Chart: Weekly Time Frame
Chart by IG
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Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
