Tuesday, October 29, 2019



Fundamental Highlights

US indices traded higher on Monday as hopes for a Fed rate cut this week alongside trade optimism fueled markets’ risk appetite. The Dow ended 0.49% higher and was further supported by encouraging corporate updates from particular constituents and overall better than expected US earnings reports. Today, the US publishes CB consumer confidence and pending home sales data. Markets will gain further insight on the US consumer, known to underpin the domestic economy amidst burdening geopolitical risks. It is worth noting that economic data ahead of the FED’s interest rate decision will be up for scrutiny as it determines not only the widely expected rate cut but the market outlook for the Fed’s stance on the course of monetary policy which factors into buoying US equities.

Technical Analysis

The Dow extended Friday’s gains as it added 132 points to end at 27090 on Monday. The price managed to press above the 27000 level and holding above it would determine whether the index can reach loftier highs in the near term. The 4H RSI reading has failed to form a higher high alongside price action and suggests that the Dow may be in for a short-term pullback unless price overcomes Monday’s high at 27124. Look for a break above 27124 to enable gains towards the higher levels at 27184, 27220 and 27268. Meanwhile, a sustained move below 27025 would indicate selling pressure and target the support provided by the 20-period MA currently at 26900.

Support: 27025/ 26900
Resistance: 27124/ 27220

Chart (H4)