Wednesday, March 27, 2019

DOWJONES - 27 March 2019

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Fundamental Highlights

US indices ended higher on Tuesday with the Dow Index rising 0.55% despite disappointing housing figures and a drop in the consumer confidence index as fears of a looming recession subdue. However, the fundamental backdrop continues to display slowing global growth and souring economic conditions in the US highlighted by the existing inversion of the treasury yield curve. While the broader narrative proposes caution in the equities market, at the forefront there remains the protracted US-China trade war to drive near-term direction and call attention for today’s release of US trade balance report.

Technical Analysis

The Dow index broke through trend line resistance on the RSI and advanced to test above the 50-period MA at 25790 before it ended at 25657. It appears that price has formed a lower high on the short-term downtrend, however price action should remain bounded within a range of 25780-25540 before taking direction. A sustained move above the 25670 level would suggest a retest of the 25790 high with the next target at 25880. On the other hand, a decline below the 25540 level would suggest downside pressure with a trade through support of 26350 needed to signal a bearish continuation

Support: 25540 / 25460
Resistance: 25780 / 25880

Chart (H4)