Tuesday, June 25, 2019

DOWJONES - 25 June 2019


Fundamental Highlights

US indices ended mixed on Monday with the Dow Jones being the only to end with a marginal gain. The Dow managed to brush off news that President Trump signed an order to impose new sanctions on Iran, and awaits US-China trade developments ahead of the G-20 summit this weekend to provide direction. Nonetheless, the rise of geopolitical tensions provide another reason to maintain caution and suggests that the risks on the global economy are underpriced. Today, the US publishes its consumer confidence report for June and New Home sales data both of which will provide insight on the health of the US economy. Moreover, Fed Chairman Powell is scheduled to speak and traders will tune in for fresh policy clues which is unlikely following the FOMC meeting last week.

Technical Analysis

The Dow Jones traded sideways on Monday before ending slightly higher at 26727. Upside momentum has cooled as markets await further developments on the trade front to build on the rally fueled by the Fed’s easier monetary policy outlook. The RSI reading holds the falling trend line while the price has been trading within the bounds of narrow Bollinger bands, suggesting impending volatility and a period of indecision. Look for a trade outside the bounds of the resistance at 26800 and the support at 26660 to provide direction on the day. A sustained move above 26800 would lead price higher towards the record higher at 26940, while a decline below 26660 would lead price lower towards the support at 26580.

Support: 26660/ 26580
Resistance: 26800/26940

Chart (H4)