Dow Jones Futures Hit Two Month Highs On Memorial Day

The Dow Jones futures trading higher on Memorial day as investors ignored rising tensions between USA and China and a new stand-off in Hong Kong and focused on the reopening of the economy and developments on the coronavirus vaccine.

Fed Governor Rosengreen in an interview on Sunday, said that the Federal Reserve is expected to begin lending money to small and medium-sized companies. The size of the program is about $600bn and targets the SME sector. Rosengreen added that there is a significant risk that unemployment would remain at double-digit levels during 2020 and monetary and fiscal support had to continue to avoid a more severe impact in the US labour market.

On Friday, the Dow Jones managed to reverse the morning session losses and ended almost unchanged helped by Apple, Cisco Systems and Intel Corp.

In Europe, the stock markets trading higher, getting a hand from better than expected IFO business climate data. The IFO Business Climate in Germany came in at 79.5, beating the forecasts of 78.3 in May. The Current Assessment came in at 78.9 below the expectations of 80. The IFO Expectations came in at 80.1, topping the expectations of 75. The Germany Gross Domestic Product (GDP) for the first quarter of 2020 came in at -2.2% in line with forecasts while the yearly Gross Domestic Product reading also matched expectations at -1.9%.

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Dow Jones Price Technical Analysis

Dow Jones futures are 0.92% higher at 24,648 as the index continues the uptrend from the March lows, as the Dow Jones futures look for a break above the two-month highs. On the technical side, the long term technical picture remains bearish as long as the index trades below the 100-day moving average, but in the short term, I can’t rule extension of the gains as long as the futures hold above the 50-day moving average. 

On the upside, initial resistance for the Dow Jones futures stands at 24,694 the daily high. A move above 24,694 might test 24,970 the high from March 10 trading session. The next hurdle for the Dow Jones futures is at 25,357 the 100-day moving average.   

On the other side, immediate support for Dow Jones futures is at 24,376 the daily low. Next strong support for the Dow Jones will be met at 24,056 the low from Friday trading session. A break below 24,056 might open the way for a test of 22,829 the 50-day moving average.    

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