The Flash Manufacturing PMI data for the US has been released, and it does not make for good reading from the perspective of potential bulls on the Dow. According to data released by Markit a short while ago, this month’s reading of 51.3 is a slight improvement over the previous reading of 49.8, but still fell short of market expectations.
The consensus among analysts was for the Flash Manufacturing PMI to come in at 52.0. The lack of conviction in the numbers allowed market participants on the Dow Jones Industrial Average to focus their attention on the domestic coronavirus situation, which continues to worsen daily.
Further pressure on the Dow also comes from the US-China front, where consulate closures have been ordered in Houston and Chengdu by both parties.
The Dow is now 0.27% lower and trades at 26567 at the time of writing.
Technical Outlook for the Dow
The daily chart of the Dow Jones Industrial Average paints an exciting picture. The lows of 29 June, 10 July and 24 July are connected by an ascending trendline, which serves as the support line for recent price action. Today’s intraday lows also bounced off the 26403 price support, where previous lows highs of 19 June, 23 June and 7 July are found. The intersection of this support and the ascending trendline is a critical price level. A breakdown of this area allows for possible selling action which may target the 25461 support (22/24 June and 9/10 July lows). 24922 remains relevant as a further target to the south if 25461 is taken out by sellers.
On the flip side, we see the 27043 price level acting as resistance (3 March, 11 June, 21/23 July highs). A break above this level targets the 27373 resistance (12 September and 1 November 2019 highs), with 28195 coming into focus as a further resistance target if 27373 fails to suppress bullish momentum.
Dow Jones Daily Chart