Wednesday, April 3, 2019

DOWJONES - 03 April 2019


Fundamental Highlights

The rally on the Dow Index took a breather on Tuesday as Wall Street digests negative earnings report from one of the Index’s constituents and a decline in core durable goods order. Buying pressure subsided as markets sought positive data to build on Monday’s global risk-on mood following expansionary manufacturing data out of China. Moreover, while the Fed’s accommodative stance remains supportive of US equities, a continuous improvement in global data and materialized hopes of US-China trade progress is required to extend the rally past the major resistance at 25260. Alongside trade headlines, Today’s US data front should influence sentiment as ADP Non-farm employment data is expected to reflect a seemingly strong US labor market, and ISM Non-manufacturing PMI is estimated to decline.

Technical Analysis

The Dow Index posted a modest loss, relative to its recent gains and ended 0.3% lower at 26179. The Index touched on support at 26115 before ending higher as the RSI reading exited the overbought region. However, price remains bounded by key resistance area at 25260/25280 and should clear this area in order to extend the uptrend towards resistance at 26340. The 20-period MA at 26080 should determine near-term direction on the Index, as holding above this level would indicate the presence of buyers and maintain range-bound price action, while a decline below this level should suggest a move towards lower levels.

Support: 26150 / 26080
Resistance: 26260/ 26340

Chart (H4)