Tuesday, April 2, 2019

DOWJONES - 02 April 2019

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Fundamental Highlights

US Indices soared over 1% on Monday driven by upbeat manufacturing data out of the two largest economies, China and US. The former triggered the rally while the latter sustained it as the data eased global growth concerns and offset lower than expected US core retail sales data. Moreover, the rebound in treasury yields aided the risk-on mood and left Wall Street excessively confident. Nonetheless, the protracted US-China trade dispute and uncertainty over Brexit continue to pose global risks while the health of the US economy remains in question amidst mixed economic data. On today’s data front, US publishes US core durable goods order which is expected to fall.

Technical Analysis

The Dow Index rallied 1.27% to end at the high of 26258. Yesterday’s bullish reaction may see an eventual correction should the index fail to overcome the resistance zone of 26260-26280 above which the next resistance is at 26340. The Dow index overlooked the overbought threshold on the RSI as the trend exhibits strength and price rises with the upper Bollinger band. Look for the RSI reading to exit the overbought territory to signal a stall in bullish momentum with initial support found at 26150, before price extends upward progress. Declining below this level would indicate the presence of selling pressure with the next support at 26080.

Support: 26150 / 26080
Resistance: 26340/ 26480

Chart (H4)