US Indices ended higher on Thursday, led in part by a surge in oil prices following dominating headlines of an attack on oil tankers at the Gulf of Oman while persisting hopes of easier monetary policy from the Fed continues to provide US equities support. In terms of data, initial jobless claims rose to mark a third week of increase and suggests a slight softening in labor market conditions which may translate into weaker consumer confidence. Thus, attention will be drawn to US retail sales data to influence price action and reflect US consumers’ willingness to spend. Moreover, the US publishes industrial production figure and Michigan consumer confidence reports which should have less of an impact. While economic data will continue to provide policy cues, the FOMC meeting next week may keep the DOW in ranging mode as markets await a clearer picture on monetary policy amidst unresolved US-China trade tensions.
The Dow index rose 0.39% on Thursday to end at 26106. The price has been trading within the bounds of narrow Bollinger bands, suggesting a period of indecision as the rally pauses. The 20-period MA currently at 26080 should determine near-term direction as a sustained move above it would indicate buying pressure and lead to a ret-test of the resistance zone at 26240/26260 should price hold above 26150. Meanwhile, a decline below 26080 would indicate selling pressure and may drive price to the support of 25940 separating the Dow from further bearish price action.
Support: 26080/ 25950