Interestingly the 29000 level did not resume its previous role and provide resistance to the index as it had done previously and in the last week has supported the index.
After moving so strongly in the last three months of last year, this year the US30 index has stalled a little trading around the 29000 level and whilst it has achieved new highs, it hasn’t kept the same momentum. In early December, the index fell 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 to finish out the year. 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.
An unseasonably warmer January boosted the U.S. jobs market to more gains, with nonfarm payrolls rising 225,000 for the month, well above estimates of a 158,000 gain.It was the construction industry, normally hampered by cooler weather, leading the way adding 44,000 jobs, well above its 2019 average of 12,000. In its latest monetary policy report to the U.S. Congress last Friday, the U.S. Federal Reserve (Fed) said key risks have receded and the likelihood of recession has declined as a “moderately” expanding U.S. economy was slowed last year by a manufacturing slump and weak global growth. “Downside risks to the U.S. outlook seem to have receded in the latter part of the year, as the conflicts over trade policy diminished somewhat, economic growth abroad showed signs of stabilizing, and financial conditions eased,” the Fed said. “The likelihood of a recession occurring over the next year has fallen noticeably in recent months,” the Fed added. However, the central bank did highlight the coronavirus and its potential long term impact, as well as “elevated” asset values, and near-record levels of corporate debt being of concern in the economic outlook.
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