Dow Looks Positive Ahead of Fed Interest Rate Decision
Sep, 17th 05:45
US indexes closed with strong gains for a second day in-a-row, with the Dow Jones Industrial Average up 140 points or 0.84%, closing the day at 16,739.35.
Stocks soared after the release of US poor inflation figures, which fueled speculation that the US Federal Reserve will likely delay a rate hike for December.
The Dow Jones broke a major resistance level during the American afternoon, now a key support, the 61.8% retracement of the latest weekly slump around 16,660.
With investors pricing a no-hike from the FED, a move by the Central Bank will be a tough bone to digest, and will likely imply a sharp intraday decline.
But if Yellen remains on hold, the rally can extend into next week, with a recovery up to the 17,700 likely in term. Technically, the daily chart shows that the 20 SMA has turned higher, and stands now around the 50% retracement of the same decline in the 16,380 region, whilst the technical indicators continue heading higher in positive territory.
In the 4 hours chart, the technical readings also favor the upside, as the index is well above a bullish 20 SMA, the Momentum indicator grinds higher well above 100, whilst the RSI hovers now around 70.