Thursday, May 9, 2019

DOWJONES - 09 May 2019


Fundamental Highlights

The Dow Jones Index fluctuated between gains and losses before it ended virtually flat at 25967 on Wednesday. Latest trade developments revealed that China won’t hold back on retaliating should the US raise tariff rates on Friday, while President Trump reported that China backtracked on its commitments and will seek to secure a deal. Mixed signals left traders uncertain of the outcome and stalled the bearish trend on the Dow Index. Fed Chairman Powell is scheduled to speak today and the US publishes PPI data alongside weekly jobless claims and trade balance reports. Outside of the data, markets will focus on US-China headlines as they await the outcome of crucial trade negotiations to determine direction of US equities.

Technical Analysis

The Dow exhibited range-bound price action on Wednesday as price fluctuated between the support at 25830 and resistance at 26030. The rising trend line from March’s lows separates the index from a bearish development while the 20-period MA acts as dynamic resistance to limit gains. An established break below the trend line support would make way for further declines towards the support at 25750 followed by 25630. However, should the support zone of 25780/25800 hold, the price would drift higher with a sustained move above 26030 required to signal buying pressure and target resistance at 26200.

Support: 25820/ 25750
Resistance: 26080/ 26200

Chart (H4)