The Dow ended marginally higher on Monday ahead of tomorrow’s crucial FOMC meeting. Many expect dovish tone from fed central bank to signal support for market. On economic data, the NY Manufacturing Index fell to negative territory for the first time in two years indicating a contraction in business activity that may be largely attributed to increased trade uncertainties. In light of the FOMC meeting, the US market brushed the figure aside as recent signs of economic weakness serve to support the Fed’s case for reducing the benchmark rate. Today the US publishes housing data which may have a muted impact on US indices, however, given that it is a critical indicator of the performance of the economy, weak numbers would support a dovish stance from the Fed. Meanwhile, The Dow’s sideways price action should persist today until the Fed’s interest rate decision provides direction.
The Dow ended 0.09% higher at 26112 as it consolidates gains above the 26000 level ahead of the crucial FOMC meeting. Volatility should remain muted and price action restricted within the bounds of the Bollinger bands until tomorrow’s meeting. Traders reaction to the 26240/26260 resistance zone will determine the continuation of the uptrend while a sustained move above the 26080 level indicates the presence of buyers. Alternately, a decline below 26080 would indicate selling pressure and target the support at 25950.
Support: 26080/ 25950