The Dow has opened the trading day slightly higher on the back of better than expected trade data from China and greater Yuan stability. The Dow is currently trading at 26087, even as the first few minutes of market open has witnessed relatively thin trading volume. Any upside by the Dow is going to face significant headwinds at the 26178 resistance area (highs of Aug, Oct and Nov 2018, as well as Feb 2019).
Earlier this week, the White House trade adviser had opined that the Fed needed to cut the interest rates in the US b 75bps in order to boost the growth of the US economy. Markets have largely shaken off these comments as trading volumes have thinned out.
Technical Plays on the Dow
The Dow opened the week with sellers dominating the trading space as a result of the weakening of the Yuan, but steps taken by the Chinese authorities to firm up the currency has eased the concerns of traders around the globe. Asian markets are up, and it remains to be seen if the Dow can surmount the resistance that lies overhead.
If it surmounts the 26178 resistance area, the Dow will target the 26,773 level. On the flip side, failure to break the 26178 resistance opens the door for the Dow to retest the ascending trendline which intersects the horizontal support line at 25,220.
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