Friday, June 7, 2019

DOWJONES - 07 June 2019


Fundamental Highlights

US indices ended higher on Thursday to mark their third successive bullish session this week. The notable gains are largely attributed to markets’ expectations of easing monetary policy from the FED after Chairman Powell expressed his readiness to respond to the negative impacts of the global trade war to the extent that it affects the US economy’s expansion. On Thursday, the markets found support on trade news as the US and Mexico resumed negotiations and President Trump would reportedly postpone the 5% tariffs set for Monday. On the other end of the global trade war, President Trump threatened to apply pressure on China with additional tariffs, further aggravating Sino-US trade tensions. Economic data provided no support and was ignored for the day as the US trade deficit figure narrowed to $50.8B, while weekly jobless claims remained steady. Today, while trade news will remain closely monitored, the focus will be on the US non-farm payroll figures, wage growth and unemployment rate as weak figures would support an imminent rate cut from the FED.

Technical Analysis

The Dow Jones rose 0.71% to end at 25720 on Thursday as bullish momentum sustained and drove price above the resistance at 25650. A decline below 25650 would indicate the presence of selling pressure with immediate support found at the 25500 coinciding with the 20-day MA. Failure to find support at the 20-day MA would lead price to target the 200-day MA around 25380. It is worthy to note that the RSI reading remains in the overbought territory which may lead price to turn lower should bullish momentum stall and price fails to extend gains past the 25810 level to target a key resistance at 25950.

Support: 25500/ 25380
Resistance: 25810/ 25950

Chart (H4)