Dow Jones Industrial Average waffles on softer Durable Goods

The Dow Jones is fighting to regain its balance after getting knocked lower.
Overall market flows are constrained with a holiday-shortened week on the cards.
US Durable Goods Orders fell more than expected in November.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) weakened to kick off the Christmas trading week, falling a little over 200 points at its lowest before staging a meager recovery to -50 points on Monday. The Dow Jones is grappling with chart territory south of 43,000 following a ten-day backslide that dragged the major equity index back underneath record bids above 45,000.

US Durable Goods Orders contracted further than expected in November, declining 1.1% MoM compared to October’s revised 0.8% upswing. Investors expected a print of -0.4%. Declines in consumer durable goods were concentrated in automotive purchases, as US Durable Goods Orders excluding Transportation fell by a meager 0.1% MoM. Median markets forecasts had expected a better core Durable Goods Orders growth of 0.3% in November.

Overall market flows are constrained during the Christmas holiday-shortened trading week. Markets will be shuttered during the midweek market session, and trading volumes are set to remain constrained throughout the entire week.

Dow Jones news

The Dow Jones has moderated after snapping it’s longest losing streak since the 70s, where the index closed lower for ten consecutive trading sessions. Most of the Dow Jones is stuck on the low side of Monday’s opening bids, but firm tech gains have limited downside losses for the broader index.

Nvidia (NVDA) rallied 3.2% and crossed above $139 per share as the broad-market tech rally continues to float on the high side. On the low side, retail giant Walmart declined 2.2%, falling to $90 per share for the first time in a month. According to the Consumer Financial Protection Bureau, the federal consumer protection agency is suing Walmart after it was revealed that Walmart unlawfully requires delivery drivers to use an expensive app with one of the consumer giant’s fintech partners, Branch Messenger.

Dow Jones price forecast

A near-term backslide has left the Dow Jones battling chart territory just south of 43,000. Price action has slipped back below the 50-day Exponential Moving Average (EMA) which is rolling over near 43,350, but a clear technical floor is getting priced in near the 42,000 handle.

Buyers will be looking for a chance to step back into another leg higher from here, though momentum traders may be waiting for a confirming close back above 43,500. On the low side, bears will be looking for a continuation to the 200-day EMA near 41,000.

Dow Jones daily chart

Economic Indicator

Durable Goods Orders

The Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation. The final figure shows the state of US production activity. Generally speaking, a high reading is bullish for the USD.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Ripple Price Forecast: XRP builds recovery momentum as whales increase exposure

Ripple (XRP) rises toward the pivotal $1.10 resistance on Thursday, marking three consecutive days of gains. This neutral-to-slightly bullish outlook follows the Federal Reserve (Fed) decision to leave interest rates unchanged in the 3.50%-3.75% range.

The FOMC: Rates left on hold; dollar falls as Warsh fails to vote for hike

The Fed kept interest rates on hold today, defying a 30% chance in the Fed Funds Futures market that rates would rise. The Committee voted 9-3 to keep rates on hold, with governors Kashkari, Hammack and Logan all voting to hike rates due to concerns about inflation. The immediate market reaction has been a sharp drop in the USD on a broad basis.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.