US indices ended lower on Friday as trade headlines maintained markets’ risk off sentiment. President Trump made remarks that raised concerns over whether the US and China should meet and continue trade talks next month. In terms of data, PPI inflation moderately rose by 0.2% in July and held at 1.7% YoY. As inflation remains muted and global trade uncertainty persists, chances of another rate cut from the Fed lingers and tomorrow’s release of US CPI figures will be another data point to tip the scales. Looking to the week ahead, focus will fall heavily on retail sales and manufacturing data from the US as markets assess the economic backdrop against which the US-China trade war unfolds. Today there are no major economic releases and trade headlines will remain a key driver of price action.
The Dow traded 0.34% lower to end at 26287 on Friday. The price fluctuated between gains and losses to record an intra-day high of 26388 and low of 26068. The 50-period MA near 26260 should determine near-term direction on the Dow, as a sustained move above this level would indicate buying pressure while a break through the high of 26388 is required to enable gains towards the 26600 level near the 50-day MA . Failure to trade above the 50-period MA should maintain downside pressure and lead price below the support at 26180 to target the 20-period MA near the support zone of 26100/26080.
Resistance: 26390/ 26520