The Dow Index traded lower on Monday with weak Chinese economic data reigniting fears over slowing global growth. Though economic indicators point to a resilient US economy and corporate earnings are expected to be decent, these figures may be undermined by a pessimistic outlook hanging on the uncertainty surrounding slowing growth abroad, the US government shutdown and US-China trade relations. Meanwhile, the pace of reportedly subdued inflation, aiding the dovish stance taken on by the Fed, should be further clarified in today’s critical PPI report from the US.
The DOW index surpassed the 200-period MA and is looking to test the new resistance at 24075. An RSI reading of 60 confirms there is room for the price action to potentially move further up with the 20-period MA acting as support off of which it would bounce as it rises. The uptrend could turn down should price action trade through support at 23650.
Support: 23760/ 23650
Resistance: 24075 / 24140