Throughout April and May 25000 level had turned away the index on several occasions, reinforcing how significant the 25000 level had become in this period, and it has been able to provide some strong support to the index in the last month or so. Should the index decline further, the 25000 level will be expected to continue to offer support, while the 27000 level continues to loom above having placed downward pressure on the index recently and earlier in the year.
Throughout April, the US30 index rallied higher to a one month high near 25000, while the key level of 22500 supported the index. During this period, the US30 index settled right down content to trade right around the 24000 level, with the 25000 level looming above and continuing to offer resistance whenever the index rallied. The US30 index is also likely to receive some support from 22500 should it break back lower through 25000.
Since mid-March the US30 index has done very well to regain most of the lost ground, after the significant drop where it moved from all time highs above 29000 down to a three year low near 18000. During its rapid fall, the US30 index completely ignored any possible levels of support on the way lower indicating how strong the move was. Fortunately the index has been able to rally higher in the last four months, consolidate around 22000 before moving back above 25000 and beyond in the last month or so.
U.S. Federal Reserve (Fed) officials meet Tuesday and Wednesday facing increasing concerns about the economic outlook given the nation’s dealing with the COVID-19 pandemic. This latest meeting comes at a time when the number of cases within the United States continues to grow with consistent new cases every day, approaching 4.5 million cases, which is raising the doubts over whether the economy is going to experience a significant downturn. Analysts are not expecting too much from the central bank at this meeting, due to the mixed economic indicators, leading them to believe the Fed won’t change course, after it cut the benchmark lending rate to 0 - 0.25% in March as the pandemic hit. To date, the central bank has offered trillions of dollars of liquidity to keep markets moving amid economic contraction and surging unemployment, while warning in its “beige book” survey released earlier this month of a “highly uncertain” outlook. Many analysts are also expecting some vague comments from the Fed Chairman, Jerome Powell, in the standard post meeting media conference, most likely indicating the Fed is keeping a close eye on all economic data and that they remain prepared to continue to provide support.
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