US Indices ended the week in positive territory as US-China trade progress and Friday’s NFP report uplifted market sentiment. The data showed unemployment remained steady while the economy added more jobs than expected for March. With a central bank committed to its dovish stance, and a protracted Sino-US trade conflict approaching a potential resolution, the bulls are offered a semblance of support. However, the path isn’t cleared and interference of the bullish run may arise from a shift in markets’ focus from big market drivers to fundamental risks posed by slowing global growth, the yield curve inversion and a weak economic data. Later in the week, a new earnings season begins and corporate reports will be another driver of short-term price action on the DOW Index.
The Dow Index made a modest rise of 0.15% on Friday and reached a high of 26478 before ending at 26424. The daily chart shows the formation of a reversal candlestick and today’s subsequent candle will determine whether the index should continue moving higher or exhibit a pullback. Thus, the outlook on the Dow will be determined by traders’ reaction to the 26478 level while near-term direction will be determined by the 20-period MA. Failure to move past the high at 26478 will result in the index drifting lower with a break through the 26260 level required to to indicate further downside price action.
Support: 26260/ 26150
Resistance: 26480/ 26550