The Dow index closed higher yesterday amid relieved fears of slowing global growth due to trade optimism surrounding the now concluded meeting between the US and China, and a recently dovish Fed further validated by the published minutes of the meeting in December. Meanwhile, the US government shutdown persists and developments over trade relations and monetary policy remain indefinite. Fed Chairman Powell speaks today and will be the main driver of market action as investors seek to interpret his statements into the outlook on the economy and rate hikes.
Yet to be clarified is the perceived correction on the Dow Index as it continued to move higher before bouncing off the resistance around 23900. Price action approaches the 20-period MA and may range within the constraints of 23800-23545 before making a decisive move. Should the RSI reading break below the 50 mark, the index is expected to meet lower support levels.
Support: 23542/ 23377
Resistance: 23800 / 23900