Thursday, October 31, 2019



Fundamental Highlights

US indices traded higher on Wednesday as the Fed predictably cut its benchmark interest rate for the third time this year. Following the move, Chairman Powell delivered a less-dovish than expected speech as he set a condition regarding higher inflation in order to bring about a rate hike while suggesting that there should be no further monetary policy easing in the near-term future. Meanwhile, US economic data provided support as the GDP figure showed the economy grew at 1.9% while the ADP employment change came above expectations at 125k. Today, the US publishes personal spending data which should have an impact on price action. Apart from the data corporate earnings reports and trade headlines will continue to bear strongest influence on sentiment and direction.

Technical Analysis

The Dow faltered below the 27025 level after the market open on Wednesday before Fed Chairman Powell’s speech bolstered price to end 115 points higher at 27186. The price briefly dipped below the support at 26974 before treading higher and passing the resistance at 27184 to reach a high of 27230. Today look for a sustained move above 27184 to indicate buying pressure while taking out the high at 27230 would clear the path towards 27268. Dow futures are pointing lower today as bullish momentum stalls and maintains price action above the 27120 level. Below 27120 we should see the Dow turn lower to find support near the 20-period MA at 27060 before climbing higher again. Below 27060, look to 26974 to provide support whilst maintaining the uptrend.

Support: 27120/ 27060
Resistance: 27230/ 27268

Chart (H4)