Monday, April 1, 2019

DOWJONES - 01 April 2019

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Fundamental Highlights

US indices posted firm gains on Friday at the back of a recovery in US treasury yields and constructive US-China trade talks that should extend into this week as well. Moreover, soft Core PCE data reinforced the FED’s accommodative stance on monetary policy which has offered US equities a backbone, and new home sales reports came in better than expected. While US-China headlines continue to catalyze US equities, economic data has taken on significance amidst fears of a weakening domestic economy. As a result, investors’ should draw attention to today’s ISM Manufacturing PMI figure and Core retail sales data to further reflect economic conditions in the US.

Technical Analysis

The Dow Index traded 0.86% higher to close at 25928 on Friday. After clearing resistance at 25780, The RSI reading broke through the 60 level and buyers took price high enough to trade through the 25880 level that has now turned to newly found support. To reinforce the bullish phase, price would have to trade above the high at 25115 to suggest a higher move towards resistance at 26160. Failure to trade through 25115 would leave the index consolidating gains above 25880 with a decline below 25780 required to signal the presence of sellers. Moreover, look for the RSI reading to exit the overbought territory to indicate a potential pullback in positive price action should price fail to overcome the 25115 level.

Support: 25880 / 25780
Resistance: 26115 / 26160

Chart (H4)