Dow Jones Set for Higher Open On Lessened Coronavirus Fears, FOMC

The US markets led by the Dow Jones Industrial Average look set to open higher this Wednesday on reduced coronavirus fears. The daily report from the China Health Commission shows a reduction in the number of new cases, and deaths, indicating that the coronavirus outbreak seems to be slowing in the epicentre of the outbreak. Furthermore, markets are being lifted by optimistic expectations from the FOMC minutes. 

InvestingCube's S&R Levels


NAS100 (11294)

Not in Sell Zone







The Dow Jones futures are marginally up today, trading at 29321 after yesterday’s 29329 close. This advance follows that of the Asian and European markets. Investors will also get a chance to look at the latest housing stats to see if the gradually heating housing market will continue on track. 

Read our Best Trading Ideas for 2020.

Technical Outlook for Dow Jones

Yesterday, we pointed out that prices were in retreat from the point marked D in the XABCD pattern spotted on the daily chart of the Dow Jones CFD asset. This point D coincided with the recent highs spotted on the Dow, at the same time that the RSI was posting lower highs. This setup provided a divergence signal which boosted the negative sentiment of yesterday as well as the price retreat from point D. 

Today’s rally will need to push above the high of yesterday’s daily candle to avoid forming a bearish harami candlestick pattern, which could have further bearish implications. The immediate support for price action is seen at point B on the XABCD pattern. The 9 Jan high and 23 Jan low are also found at this price level. Below this area, 28750 (14 Jan and 5 Feb lows) could become relevant, before 28915 (point C on the pattern) comes into focus as another support target. 

On the flip side, recovery that is able to overcome yesterday’s daily high could allow the Dow to continue making some recovery to aim for 29433 (peak at point X), after which the recent all-time highs of 29587 may come into play. 

Don’t miss a beat! Follow us on Telegram and Twitter.

More content