Dow Jones Futures Test 200-Day SMA and Bounce In Premarket

Summary:

The Dow Jones futures give up over 263 points as the risk-off sentiment returns to markets with sharp corrections in Europe as DAX gives up over 2.5% after

The Dow Jones futures give up over 263 points as the risk-off sentiment returns to markets with sharp corrections in Europe as DAX gives up over 2.5% after weaker than GDP data.

Yesterday, the Fed kept interest rates unchanged at 0% – 0.25% but extended the USD swap line with other major central banks until March next year. Chairman Powell said that Fed would keep the accommodative policy until the U.S. economy surpasses the negative effects of the coronavirus pandemic. Powell also reiterated that the central bank is ready to do whatever it takes to support the U.S. economy.

Investors await today the GDP for the second quarter and the initial jobless claims. The consensus for the GDP is for a contraction of around 34.5%.
On the corporate front, we have a busy day with Alphabet, Apple, Facebook, and Amazon reporting earnings after the closing bell. Qualcomm jumps higher in premarket after better than expected earnings results. PayPal hit record highs before the opening bell after the second-quarter results.

Dow Jones Futures Daily Technical Analysis

Dow Jones futures are 0.89% lower at 26,205 having breached earlier today the 200-day moving average for the first time the last two weeks. Dow Jones futures trading today at the lowest level since July 14. A break below the 200-day SMA would cancel the bullish momentum and might test the next support at 25,956 the 100-day moving average.

On the upside, Dow futures would face the intraday resistance at 26,477 today’s top. A break above would target the next supply zone at 27,068 the high from July 23. Next resistance for the futures stands at 27,483 the high from June 10.