Thursday, September 5, 2019



Fundamental Highlights

US indices traded higher on Wednesday as global sentiment improved on positive geopolitical updates. Events in Hong Kong eased the recent instability while Brexit developments have increased hopes of averting a no-deal Brexit. Separately on economic data, the US trade deficit narrowed by less than expected as the US-China trade dispute persists. Today, news that the two nations agreed to meet in October to resume negotiations should inspire risk-on flows as it improves trade sentiment. Apart from trade headlines, traders should look to US ADP Non-farm employment, factory orders and ISM Non-manufacturing PMI data to impact price action during the day whilst accounting for the positive risk on environment.

Technical Analysis

The Dow surged by 237 points to end at 26355 on Wednesday as it reversed hefty losses from the previous session. The price managed to trade above the 26280 level near the 20-period MA to indicate buying pressure however has yet to reach the 26420 resistance level. Today, Dow futures overcame the 26420 level and broke above the recent high at 26550 to signal a bullish continuation towards the higher resistance at 26820. Look for a trade above the 26685 level to enable further gains on the Dow, as the RSI reading has reached the overbought territory suggesting that price may turn lower before extending the uptrend. Today, Look to the 26550 to determine near-term direction on the Dow as a sustained move above this level would maintain buying pressure while a decline below this level would lead price to the lower support at 26420 followed by 26300.

Support: 26550/ 26420
Resistance: 26685/ 26820

Chart (H4)