The Dow Index unexpectedly plunged 207 points in yesterday’s session offsetting news that the US and China are edging towards a deal and raising the question of whether the prospect of trade deal has been priced into markets. The pullback could also be pinned on the index’s recent overbought conditions in its long rally, thus further clarity on the trade front and macroeconomic data will be sought to offer US equities ground while investors remain on the sidelines. Today, Investors will look to Non-Manufacturing PMI and Services PMI reports to dictate sentiment and price action.
The Dow Index fell to the support at 25620 before bouncing off to close at 25819. While the uptrend is in question, the short-term bias looks neutral to bearish as price failed to push past the peak at 26160 and drifted lower. Further downside pressure will be dictated by traders’ reaction to the support at 25620, while a trade through the resistance at 25880 should signal the presence of buyers.
Support: 25620 / 25520
Resistance: 25880 / 26080