The start to the week saw new record highs and optimism return to the U.S markets as the U.S earnings starts winding down and economic data becomes the focal point. The significant increase in new home sales were overshadowed by consumer confidence data which dropped to a six-year low.
Some positive news on the U.S-China trade front is that both countries reaffirmed their commitment to the phase one trade deal which gave a boost to markets on Tuesday.
The latest is that “China is set to buy a record amount of American soybeans this year as lower prices help the Asian nation boost purchases pledged under the phase-one trade deal, according to people familiar with the matter.” - BloombergQuint
The Dow is still lagging other major U.S Indices in reaching new all-time highs but that might change with the latest reshuffle. The removal of Exxon Mobil, Raytheon and Pfizer from the benchmark Index and replacing them with tech stocks, Salesforce, Amgen and Honeywell. These changes will take effect on the 31st of August 2020 and the tech additions might just see the Dow push higher.
The price action has made higher highs and higher lows since July and is currently stalling at our resistance area of 28123. We need to see this area turn into a support level to push prices higher back to all-time highs and our third target price at 29390.
Chart Source: Wall Street 30 Daily Timeframe - GT247 MT5 Trading Platform
The outlook here has not changed as I will still be keeping a close eye on the 27155-support level for a bounce to our possible target price at the 29390-resistance level if price moves lower from today.
Chart Source: Wall Street 30 Daily Timeframe - GT247 MT5 Trading Platform
Take note: The outlook and levels might change as this outlook is released prior to the current day (Wednesday the 26th of August 2020) U.S Market open.
Sources – MetaTrader5, Reuters, Market Insider, BloombergQuint
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.
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