The Dow Jones futures have resumed the rally this Thursday as markets seem to have taken the statement of US President Donald Trump in stride. The US President said that Iran was “standing down” after a missile strike conducted by Iran on a military base in Iraq showed only minor damage to buildings and no human casualties. The speech itself was a mix of tough words and ended with a somewhat conciliatory tone, which has given the markets some hope that the situation would not escalate further.
This has allowed the markets to renew their attention on the US-China trade 1 deal. It was reported earlier in the week that the Chinese trade delegation was to travel to the US on Jan 13 for the possible signing of this deal as early as next week.
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Technical Outlook: Dow Jones
The Dow has resumed the uptrend after two days of selloff occasioned by the US-Iran situation. The Andrew’s pitchfork shows that the Dow has bounced off 1st support line and is now testing the resistance seen at 28,731.7, which is the previous weekly high seen on the weekly candle ended Dec 23.
A break above this price level will challenge the all-time high seen on last week’s candle, with the potential to break even higher to new highs if the pressure is strong enough. A potential new high lies at 29,503, which is where a Fibonacci extension level is located.
On the flip side, a retracement selloff on the Dow which may be induced by profit taking could send the Dow lower, with potential support targets at 28,166, 27, 353 and 26821 all in the picture.
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