The Dow index gained over 1% amid optimism surrounding the trade talks between the US and China. Progress was made on certain issues and the critical negotiations have been extended till today igniting hopes of further advances on the trade deal. While the key trade balance report was withheld yesterday due to the US government shutdown, job openings figures fell short of estimates yet sufficed in maintaining the positive view on the US labor market. Today’s release of the minutes from the FOMC meeting in December is in focus as it reveals whether the Fed’s recent dovish account is worth considering and maintaining the upside move in equities.
The DOW index retested and surpassed 23675 allowing it to reach the resistance coinciding with the 200-period EMA at 23890. Should buyers push past that level, the price will continue its gradual rise towards higher resistance levels. On the daily chart, the RSI reading reached the 50 mark and will need to move well above to confirm buying pressure while the price action holds above support of 23675.
Support: 23675/ 23542
Resistance: 23890 / 24070