Morning Brief: Dow Jones Rallies on Stimulus Hopes as US Dollar Index (DXY) Retreats

US equities have extended the gains they made yesterday as investors remain optimistic about a stimulus deal. The Dow Jones, which rose by 530 points yesterday, is up by 163 points in the futures market. Similarly, futures tied to the S&P 500 and Nasdaq 100 indices are up by 0.60% and 0.65%, respectively. Similarly, the US dollar index (DXY) has declined by 0.15%.

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NAS100

NAS100 (11324.8)

In Profit

STOP

SELL

TP1

11478

TP2

11338

The price action in the equities and the US dollar market is mostly because investors believe that congress will do the right thing and pass a stimulus, albeit a smaller one. In a statement yesterday, the president said that he is open to signing a deal that gives people $1,200 as soon as possible. He is also ready to sign a deal that extends the paycheck protection program and more funding to airlines.

Equities are also rising as investors wait for the upcoming earning season. In the season, which will start on Monday, analysts believe that companies will release better-than-expected numbers. Among the companies to watch will be JP Morgan, Citigroup, and Goldman Sachs. Earlier today, in Asia, Samsung said that its profit rose by 58% in the third quarter. Its operating profit rose to $10.5 billion, higher than the $10.5 billion analysts were expecting.

Meanwhile, in Europe, futures tied to the DAX index, FTSE 100, and Stoxx 50 have jumped by 0.53%, 0.30%, and 0.70%, respectively.

In the commodities market, the price of crude oil is up slightly as investors continue focusing on Hurricane Delta that is barrelling towards the Gulf of Mexico. Oil companies have already closed some of their wells in anticipation of the hurricane. Meanwhile, gold and silver prices are up by 0.33% and 1.02%, respectively.

Dow Jones technical outlook

The four-hour chart shows that Dow Jones futures have been in a strong upward trend recently. The index is trading at $28,503, which is just 3 points above the important psychologically-important level of $28,000. The price is also along the upper side of the ascending channel. It is also slightly above the 25-day and 15-day moving averages.

Therefore, I suspect that the price will continue rising as bulls aim for the next important level at $28,800, which is 1% above the current level. The alternate scenario is where the price pulls back as bears attempt to retest the lower side of the channel at $27,638.

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Dow Jones technical chart

Dow Jones

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