Earlier last month, it had fallen sharply away from the then all time high above 28000, and was possibly eyeing off support at 27000 given the rate it was falling, however it quickly regained that lost ground and returned back above 28000 before its strong move in the last few weeks. Should the index decline from its current levels, the 28000 level may also play a role and provide support.
After trading around the key 27000 level for several weeks near the end of October, the US30 index broke away and surged higher to then all time highs above 28000, which suggests the 27000 level will also provide some support in the future if called upon. Throughout October it rallied well and moved back above the current key level of 27000 after the index was ably supported by the 26000 level which propped up the index earlier, which may also provide some support.
It was again the 26000 level which allowed the index to move well to a one month high above 27000 mid-September, and throughout August the US30 Index traded back and forth around the key 26000 level. During the previous range trading, it found support at 25200 and this level was established after it suffered its largest falls this year dropping sharply from near its then all time highs down to its lowest levels in two months near 25000 in early August.
The International Monetary Fund (IMF) has revised its global growth rate down from 3.4% to 3.3% for 2020, having become less optimistic and warning that the outlook remains sluggish. Gita Gopinath, the IMF’s chief economist wrote, “The projected recovery for global growth remains uncertain. It continues to rely on recoveries in stressed and underperforming emerging market economies, as growth in advanced economies stabilizes at close to current levels.” The IMF made specific note about the recent trade deal with the China signing a ‘phase one’ trade deal with the United States, which was a positive and a way of reducing tension in the markets. “Some risks have partially receded with the announcement of a U.S. - China Phase I trade deal and lower likelihood of a no-deal Brexit,” Gopinath said. The IMF also specifically mention central banks and their important roles in their respective economies. “Monetary policy has continued to support growth and buoyant financial conditions. With these developments, there are now tentative signs that global growth may be stabilizing, though at subdued levels,” Gopinath also said in the report.
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