Tuesday, June 11, 2019

DOWJONES - 11 June 2019


Fundamental Highlights

The Dow ended 0.30% higher to start the week on a positive note at the back of renewed trade optimism. While heightened expectations of a Fed rate cut provide US equities with a backbone, the primary catalyst stems from trade developments which have recently proved positive as the US abandons plans to impose tariffs on Mexico as the two nations reached an agreement. However what remains is the US-China trade impasse and the risks it poses to domestic and global economic growth which could eventually make way for selling pressure for lack of progress and escalating tensions. On economic data, US Jolt job openings declined and had no influence during the day. It should be a different case for the PPI data which will draw attention as it would reflect the economy’s health and determine whether an imminent rate cate is necessary in the face of lagging inflation.

Technical Analysis

The Dow Jones not only extended gains to end at 26062, but spent the previous session trading above the 26000 level thereby indicating the strength of buying pressure. However the price has yet to trade above the the index’s high of the day at 26240 to suggest further upside moves towards resistance at 26380. Holding above the 26180 level would indicate the presence of buyers and increase the chances of overcoming resistance at 26240. Meanwhile, look for the RSI reading to exit the overbought region and a sustained move below 26180 to leave price ranging lower, with a decline below the support level at 25940 required to initiate further downside price action.

Support: 25940/ 25720
Resistance: 26180/ 26240

Chart (H4)