Monday, July 22, 2019

DOWJONES - 22 July 2019


Fundamental Highlights

US Indices ended lower on Friday as optimism over Fed John Williams’s exceptionally dovish remarks was subdued. Markets’ bullish reaction over increasing expectations for a 50 point rate cut from the day prior was countered by a Fed spokesperson stating that the dovish remarks were not a reflection of the Fed’s current policy stance. Moreover, news of Iran seizing a British oil tanker dented bullish sentiment and added to geopolitical tensions. Meanwhile, positive updates came in the form of economic data and earnings reports ,as consumer sentiment and expectation figures for July rose above their previous posts and major US corporations released better than expected earnings results. There is a busy week ahead for US equities as bulk of earnings reports alongside global growth related economic data will be released. Today, however, there are no major economic releases out of the US and we should see the Dow’s price action be subject to geopolitical and trade headlines.

Technical Analysis

The Dow traded 0.25% lower to end at 27154 on Friday. The price initially traded higher to meet resistance at 27335 before declining well below the support at 27220 and towards the previous low at 27050. However, the Dow managed to hold slightly above this low, which would determine later today whether the Dow is in for further losses. Should the Dow sustain above the 27050 level, look for price to bounce higher where it would meet the 20-period MA acting as dynamic resistance at 27220. Alternately, Failure to hold above the 27050 level would lead the Dow towards the confluence of support provided by the ascending trend line from June 27th low and the 27000 level separating the index from negative territory.

Support: 27050/ 27000
Resistance: 27220/ 27270

Chart (H4)