Tuesday, May 7, 2019

DOWJONES - 07 May 2019


Fundamental Highlights

US Indices tumbled early Monday as global markets reacted to President Trump’s threats to raise tariff rates on China before steadily rebounding to finish lower. Aiding the recovery was news that Chinese officials would resume trade negotiations this Wednesday despite tariff threats. While the move may have been interpreted as a mere tactic to elicit compliance from China’s end, it nonetheless casted uncertainty on a reportedly imminent trade deal and discourages a risk-on mood. Given the lack of significant economic data, Traders’ should continue to monitor US-China trade headlines which are likely to drive price action.

Technical Analysis

The Dow Index reached a low of 25910 before reversing losses through Monday’s session to end 0.25% lower at 26438. The short-term outlook has shifted to the downside as the index is seen forming a series of lower highs and lower lows. Moreover, the 50-period MA around 12400 is acting as dynamic resistance on the Dow and may limit further gains towards the resistance at. Meanwhile, Holding above 26200 would indicate the presence of buying pressure while a move below this level would target the support at 26080 separating the Index from extending its losses below 25910.

Support: 26200/ 26080
Resistance: 26400/ 26520

Chart (H4)