US indices posted sharp gains on Tuesday amidst headlines on an averted government shutdown and positive prospects for a US-China trade deal as Trump expresses a willingness to extend the March 1st deadline should trade progress be made. However, markets reacted on hopes that have yet to materialize with time that leaves room for further developments. Adding to the optimism, US Job openings in December rose and supported Fed Chairman Powell’s reiteration of a strong US economy. Today, investors’ sentiment will be determined by US CPI data and statements from Fed members.
The DOW index rose 1.5% to close at 25425. The Index took out the recent top of 25380 to resume its uptrend with its next target at the 25670 level. Failure to sustain the rally above 25380 will signal selling pressure, while taking out resistance at 25550 will signal further upside move along the upper band. While the RSI reading approaches the overbought region, bullish momentum will keep the price rising before a potential pullback.
Support: 25380 / 25225
Resistance: 25550 / 25670