- Summary:
- The Dow Jones remains under pressure as the Coronavirus continues to spread across the world.
The Dow Jones remains under pressure as the Coronavirus continues to spread across the world. In a move to slow the growth in Italy, the government told its citizens to stay indoors and work from home. This is the first good move, but more countries in Europe need to follow to stop the spread in countries like Germany, Spain, and France. In the US, the situation is not clear, but it looks like the spread of the virus will extend in the weeks ahead.
To combat the economic consequences of the infection, several central banks have reduced interest rates, and the latest one to act as the Bank of England. Tomorrow the European central bank is anticipated to take action, and they might add to their QE.
In China, the government closed large parts of the country and also implemented monetary support. China appears to be coming back to their feet, and their stock markets have bounced back. In Europe and the US, we mainly see financial support, and more is probably needed to stop the virus spread, so stock market indices, like the Dow Jones, remain under pressure.
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Dow Jones Technical Analysis
In the very short-term, the trend is downwards below the March 10 high of 25060, and as long as the price trades below the high, the Dow Jones might revisit the 2020 low of 23422. On a break to the 2020-low, the next support level will be the 2019-low at 22581, followed by the 2018-low at 21590. However, if the index trades above the March 10 high, the price might be able to reach the March 6 high at 25992. It could also be the start of the creation of a longer-term low in the index.