US Indices ended sharply lower on Tuesday as US-Iranian tensions rise while markets await the G-20 summit meeting to clear the unresolved tensions on the global trade front. On economic data, The US consumer confidence report revealed a drop of nearly 10 points which was attributed to the persistent uncertainty on the US-China trade dispute. Adding to the gloomy economic outlook was a decline of 7.8% in new home sales for May. Meanwhile, monetary policy remarks weighed on sentiment and dragged US equities lower as markets realize that a rate cut may not be as aggressive and as imminent as expected. Nonetheless, Chairman Powell reiterated the central bank’s readiness to provide policy support to sustain expansion in the face of growing trade tensions and weak economic data. In terms of data, today’s focus will be on Core durable goods orders report as it should impact price action during the day while markets tread cautiously.
The Dow Jones reversed the gains fueled by the prospect of a Fed rate cut as sentiment turns negative ahead of the G-20 summit meeting. The Index fell by 0.67% to end at 26548 on Tuesday as price broke out of its range and below the 26660 level to find support at 26530. Look for a trade below 26530 to drive the index towards the support at 26421 under which the bullish view would be impaired. Meanwhile, trading above the 20-period MA around 26660 would bring the resistance at 26800 back into view.
Support: 26470/ 26420