Thursday, September 26, 2019



Fundamental Highlights

US indices ended in positive territory on Wednesday as positive trade comments from President Trump saw risk appetite recover. The President’s remarks remain unpredictable and inconsistent as he claimed that a trade deal might be reached sooner than expected after he had previously suggested that the trade war would cease to end any time soon. Nonetheless, given that the trade war is at the forefront of markets’ concerns, trade headlines will continue to be the dominant driving force of price action. In terms of data, new home sales figures came in better than expected in August. Today the US publishes GDP, pending home sales, jobless claims and trade data while a slew of Fed members are scheduled to speak. The data and any hints at future monetary policy will have an impact on price action during the day while sentiment is to remain cautious as President Trump is to undergo an impeachment inquiry whilst managing a trade war with China.

Technical Analysis

The Dow gained 162 points to end at 26970 on Wednesday. The price found support near 26720 before bouncing back up to meet the 27000 level coinciding with the trend line resistance tracing the sequence of lower highs on the downtrend. Today, look for a sustained move below the 27000 level and trend line resistance to maintain the downtrend, with a decline below 26900 required to indicate selling pressure and drive the Dow back to the support at 26800 and 26720. Below 26720, the index will target the lower levels at 26660 and 26600 to form a new low on its downtrend. Should we see a failure to break above the trend-line resistance and a respect of the support at 26720, the Dow should maintain range-bound price action.

Support: 26800/ 26700
Resistance: 27000/ 27100

Chart (H4)