Friday, July 26, 2019

DOWJONES - 26 July 2019


Fundamental Highlights

US indices ended lower on Thursday amidst soft corporate earnings and positive economic data. The US durable goods order rose beyond expectations while jobless claims declined, however the data did little to improve sentiment as it raised the prospect of a less dovish Fed which would match the ECB’s stance in yesterday’s monetary policy meeting. Today, the US reports its preliminary Q2 GDP reading which is estimated to have slowed to 1.8%. Markets will focus on the result as it determines the likelihood of a rate cut at the FOMC meeting later next week. Moreover, yesterday’s mixed batch of corporate earnings results from the tech sector will influence price action in today’s session.

Technical Analysis

The Dow index recorded an intraday high of 27340 and dropped to a low of 27032 before ending at 27140. The price continues to trade within the range above the 27000 psychological support level and below its record high at 27388. Until we see price exit this range, the Dow should remain directionless. For today, look for a move above 27170 to indicate buying pressure and target the 20-period Ma around 27220. A sustained move above the 20-period MA would be required to drive the Dow back into record high territory. Alternately, a sustained move below 27170 would maintain selling pressure and lead the Dow towards the confluence of support provided by the ascending trend line from June 27th low and the 27070 level.

Support: 27070/27000
Resistance: 27170/ 27220

Chart (H4)