Just a day after the Dow ticked up on comments from US Fed Chair Jerome Powell, renewed US-China trade optimism is pushing the Dow much higher this Thursday. The source of the renewed optimism comes from none other than US President Donald Trump, who just tweeted that the US and China were close to getting a big deal.
“Getting very close to a big deal with China. They want it, and so do we”, he tweeted.
This is not the first time such tweets have come out only for investors to be disappointed eventually. However, with the December 15 deadline fast approaching, it seems investors on the Dow are desperate for some good news. They may just have got what they are looking for, as the Dow Jones is up to 28110 and is looking good to challenge the recent all-time highs if the bullish momentum is anything to go by.
If sides are able to work out the final details of a Phase 1 US-China trade deal and move closer to signing it within the next three days, it is likely that the US may delay the planned tariff hike on Chinese imports, which will boost risk sentiment in the markets.
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Technical Outlook for Dow Jones
The Dow is presently pushing above 28,132 and if it continues on this trajectory, a challenge to the all-time highs that was registered at 28, 200.50 cannot be ruled out. However, price must breach 28, 166.4 (December 2 high) to attempt a push to the all-time high levels. A break of the resistance posed by this price level takes the Dow into uncharted positive territory.
However, a pullback from this resistance level, either from profit taking or from any negative comments about the situation could lead to a retest of 27765 or 27353.4, which is where price has recently found support on pullbacks from the highs of recent weeks.
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