Morning Brief: Dollar Index (DXY) Slides as Dow Jones and DAX Index Futures Rise

Nasdaq 100

US futures are in the green, fuelled by strong demand for software-related companies and a weaker dollar. Futures tied to the Dow Jones rose by 63 points while those tied to the S&P 500 are up by 10 points. In Asia, the Hang Seng, Nikkei 225, and Shanghai Composite rose by 1.40%, 0.30%, and 0.56%, respectively. At the same time, in Europe, futures tied to the DAX index and FTSE 100 are all in the green.

Bayer and Volkswagen push DAX index higher

There are several catalysts in global stocks today. In Germany, futures tied to the blue-chip DAX index are in the green because of victories by Bayer and Volkswagen. In the United States, Bayer settled – without admitting guilt – with more than 38,000 women. The women claimed that Bayer’s birth control products had harmful effects.

Meanwhile, Volkswagen, the giant auto manufacturer defeated the Securities and Exchange Commission (SEC) in the US. The SEC had sued the company for raising billions of dollars when the company knew that it’s cars had carbon cheating devices. The DAX index is trading at 12,888 euros.

US dollar index under pressure

Meanwhile, the US dollar index is under pressure today. The index, which measures the dollar’s performance against a basket of currencies, is down by 0.20%. This decline is possibly because of the disappointing initial jobless claims numbers that came out yesterday. The numbers showed that more than 1.1 million Americans signed for initial jobless claims in the previous week. That was a disappointment since the claims had fallen to below 1 million in the previous week.

Dow Jones rises on trade and vaccine optimism

Dow Jones and S&P 500 futures are possibly gaining because of optimism about trade and vaccine. In a statement yesterday, Chinese officials confirmed that its side and the American side will meet to conduct a review of the deal. This was good news since the two sides postponed the review a week ago.

Meanwhile, the Dow Jones is also rising because of positive vaccine news. In a statement yesterday, Pfizer and BioNTech said that their vaccine was on track for regulatory review in the next few months. Another positive news is that Lyft and Uber got more time to resolve their differences with the state.

Dow Jones technical forecast

The Dow Jones futures are trading at $27,767. On the daily chart, the index has found strong resistance after it reached a level of $28,163. The price remains above the 50-day and 100-day exponential moving averages. Also, the price has formed an ascending triangle pattern.

This means that the index is likely to continue rising as bulls target the next resistance at $29,000. On the flip side, a move below $26,000 will invalidate this trend. This price is the lowest level it was on 30th and 31st July.

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Dow Jones technical chart

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