Dow Jones Opens Lower As Softer Risk Tone Pressures Global Markets
Softer appetite for risk on the lack of progress in crafting a new stimulus package weighs down the Dow Jones Industrial Average on the day. This has also been exacerbated by global markets’ response to the increased potential of a no-deal Brexit transition process. Officials from both sides of the EU-UK divide have all talked up the likelihood that no trade deal will be in place by deadline day.
However, losses could be capped by news that the FDA is seeking to “rapidly” approve the use of Pfizer’s coronavirus vaccine, following the approval by an advisory panel. Furthermore, the rise of Disney’s shares on Friday following upbeat growth forecasts could also limit Dow’s losses.
Technical Levels to Watch
Friday’s lower open puts the lower boundary of the triangle at risk and sets the stage for the Dow to extend lower towards 29255, pending confirmation of the breakdown. A dip below 29255 brings 28979 into the picture and also invalidates the triangle’s bullish breakout outcome.
On the flip side, a break above 30101 triggers a new record, allowing the Dow to set its sights on the potential upside target at 31158, where the 78.6% Fibonacci extension from the May 13 to September 2 price swing lies.