Dow Jones Finds Support and Should Head Higher

Summary:

The Dow Jones rebounded from Friday's Trump-driven sell-off and held support for another push higher ahead of Fed minutes.

The Dow Jones rebounded from Friday’s Trump-driven sell-off and held support for another push higher. Traders are watching Trump’s condition and his apparently speedy recovery has helped to remove uncertainty over the election process and the potential for a further stimulus package in the United States. House Democrats approved a $2.2 trillion support package just before Trump’s virus diagnosis.

Friday’s Non Farm Payrolls data saw a slightly lower than expected number of new jobs but the unemployment rate was under 8% and continues to show a solid enough recovery for the U.S. economy.

This week sees the release of the Federal Reserve’s FOMC meeting minutes and the stock market’s movement may be muted before this release. Europe is still under the grip of rising virus cases and the weekend saw new restrictions in Madrid. The Spanish capital saw a partial lockdown introduced with police controlling travel in and out of the city and this will keep some pressure on European stocks.

The Dow should head higher now after holding the support which marked the June 9th high. A positive recovery for President Trump would boost stocks and would also see traders more hopeful about a second stimulus package being approved.

Dow Jones Technical Outlook

The Dow Jones rebounded from a Friday sell-off and held support at the 27,650 level. The price will likely head higher now and first resistance is above 28,000. Getting above there would see the index move towards the channel resistance at 29,000 which is also the highs from September 3rd. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.