Dow Jones index started higher for one more day ahead of the Fed’s Chair Powell testimony before Congress. Fed’s Chair Jerome Powell said Fed policy is well positioned after a series of rate cuts in 2019. Powell also noted that the Fed is ‘closely monitoring’ the coronavirus outbreak. Powell sees inflation to gradually moving towards the 2% target. Fed is looking to slowly move away from the active use of repos. Powell also warned that the low-interest-rate environment might limit the ability of central banks to reduce policy rates enough to support the economy during a downturn. Jerome Powell comments failed to inspire investors as the stock indices and the USD are almost unchanged after the testimony.
On the data front the United States NFIB Business Optimism Index came in at 104.3 topping the forecasts of 103.4 in January. The United States Redbook Index fell from the previous 0.2% to -0.7% on February 7. The yearly reading declined to 4.8% on February 7 from the prior reading of 5.7%.
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Dow Jones Support and Resistance
Dow Jones hits fresh all-time highs as the bullish momentum is still intact. Every pullback looks like a buying opportunity.
On the upside, immediate resistance for the Dow Jones Industrial Average index will be met at 29,406.51 the daily top. Next resistance for the index will be met at 29600 psychological resistance mark.
On the downside, initial resistance for the Dow Jones stands at 29310 the daily low. In case of further correction the next support zone for Dow Jones will be met at 28997 the low from yesterday’s trading session. The 50-day moving average at 28593 will provide further support.