Trading proved to be range-bound in yesterday’s session with the Dow Index barely changed as it ended 0.04% lower. The previous session saw a sharp fall as markets readjusted their rate cut expectations in response to Fed members’ insinuations of a less aggressive and imminent policy support approach. Threatening the Dow with further downside price action is the widely anticipated G-20 summit which has left market participants on the sidelines, evident in yesterday’s subdued reaction to positive trade headlines as a US official expressed optimism over potential trade progress. While today’s economic data should impact the Dow’s direction as the US publishes pending home sales data , weekly jobless claims and the finalized 1st quarter GDP, the lack of direction may extend into the weekend after which market participants can assess the state of US-China trade relations.
The Dow ended 11 points lower at 25536 on Wednesday. The price edged towards the resistance around 26660 following positive trade headlines in early trading however, held below that level and later dipped to the support level at 26500. So long as price treads below the 20-period MA currently at 26660, the Dow will be vulnerable to further downside price action and a potential break below the 26500 level which would then target 26420.
Support: 26500/ 26420