Wall Street robust despite geopolitical tensions, DJIA holds above key 61.8% support


 

  • DJIA, added 102 points, or 0.4% to 26,107.
  • S&P 500 index put up 12 points, or 0.4% to reach 2,892.
  • The Nasdaq Composite index added 44 points, or 0.6% to 7,837.

Wall Street's benchmarks performed robustly on Thursday, despite the heightened angst over trade wars and geopolitics in general. Ironically, the Iran risk helped to lift Wall Street on the back of a rise in part lead by shares of energy companies. The Dow Jones Industrial Average, DJIA, added 102 points, or 0.4% to 26,107, while the S&P 500 index put up 12 points, or 0.4% to reach 2,892. The Nasdaq Composite index added 44 points, or 0.6% to 7,837.

Additionally, the recent inflation data released earlier in the week showed prices falling which has added to the speculation that the Federal Reserve is on course to lower interest rates in the coming months - However, 2Y US Treasury yields rallied by another 5bps as the curve bull-steepened in response to rising geopolitical tensions.

US data

Analysts at ANZ Bank offered a summary of the US data released overnight as follows:

  • A fall in US import prices to lowest level in five months supports the case for the Federal Reserve to cut interest rates this year. Import prices for May were down 0.3% and April data was revised down to +0.1%. Prices of goods imported from China were down 0.1% in May, indicating the tariffs are impacting volumes but not the import price. The tariff cost is primarily being absorbed by the US, where profit margins are being hit harder than the consumer wallet.
  • US jobless numbers lifted in the week ended June 8, defying market expectations. The four week moving average of claims increased by 2500 last week, indicating a slight softening in the labour market.
     

Looking ahead, data will be front and center ahead of the weekend, with markets likely to react to both retail sales and IP. "Strength in both indicators could allow markets to pencil out some rate cut odds, but further weakness could continue to drive rates lower," analysts at TD Securities argued. 

DJIA levels

For the DJIA, the technical outlook stays sideways while above the key 61.8% Fibo retracement level of April to June swing highs and lows. Bulls need to get through the 78.6% mark in the 26200s with a confluence of the 12th April gap the prior day. Bears will seek a break below the  20-D EMA that located just below the 50% Fibo of the recent daily range guarding a run towards the 200 D EMA and then the 25200 level, as being around the 11th March swing lows. On a drop below 25000, bears can look towards 24500s and then 50% of the upside run made at the end of Dec at 24150.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD pressured around 1.1200 amid dovish ECB comments

EUR/USD is trading around 1.1200 after ECB officials expressed concern about global growth President Draghi will speak later. Tension is rising toward the Fed decision after US retail sales surprised on Friday.

EUR/USD News

GBP/USD pressured below 1.2600, Conservative contest in focus

GBP/USD is trading below 1.2600, consolidating the losses seen on Friday after US retail sales beat expectations. The Conservative contest is heating up ahead of tomorrow's second vote.

GBP/USD News

USD/JPY: wait-and-see continues ahead of Fed

The dollar consolidates its gains against most rival, and scarce data exacerbates the quietness. USD/JPY bullish above 108.90, bearish below 108.10.

USD/JPY News

Gold: 100-month MA is a level to beat for the bulls

Gold (XAU/USD) is struggling to cut through key technical line which proved a tough nut to crack in 2018. The yellow metal rose to $1,358 on Friday, but the break above the 100-month MA.

Gold News

Gold: Signs of bullish exhaustion ahead of the Fed

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision.

Read more

Majors

Cryptocurrencies

Signatures