US indices ended higher on Wednesday amid reports on the US and China nearing a deal settlement after a prolonged trade dispute. However, US data on ADP employment came in lower than expected while the ISM non-manufacturing index, though remained in expansion territory, declined. Moreover, the risk on sentiment is aided by this week’s recovery in US treasury yields despite concerns of a weakening domestic economy being valid in light of disappointing data. Ahead of tomorrow’s slew of employment reports, US publishes initial jobless claims which is expected to rise. As was seen in yesterday’s session, the impact of US data may be muted as news report that Presidents of the US and China are scheduled to meet today and trade optimism may continue to buoy the Dow index.
The Dow Index made a modest rise of 0.15% and ended at 26218 on Wednesday as price remained bounded within the range of 26280-26115. Major resistance area around 26260/26280 was tested, however bulls failed to take the index higher as doji candles confirm a phase of indecision. Until price trades above this resistance area, the index is likely to maintain range bound price action. Meanwhile, holding below the support at 26150 would suggest the presence of sellers with a move below support at 26080 required to indicate downside price action.
Support: 26150 / 26080
Resistance: 26260/ 26340