DJIA: negative dynamics prevails
25/06/2018
Current dynamics
The main US stock indices rose on Friday, mainly due to oil and gas sector securities against the backdrop of a restrained OPEC decision to increase oil production. S&P500 rose by 0.2% on Friday to 2,754.88 points, although it lost 24.78 points, or 0.9%, over the week.
DJIA on Friday increased by 119.19 points (+0.5%), to 24580.89 points. However, for the week also fell, losing 509.59 points, or 2%.
Since mid-June, the main US stock indexes are declining. The escalation of international trade conflicts, or rather, the escalation of the contradictions in the US trade relations with other major partners such as China, the EU, Canada, contribute to the fact that investors escape from the risks of buying high-yield assets of the stock markets. In this situation, the dollar is a protective asset. Additional pressure on the stock indices is the actions of the Fed. As you know, in mid-June, the Fed raised the rate by 0.25% and signaled a higher rate of tightening of monetary policy.
US President Donald Trump on Friday threatened to introduce a 20% duty on cars from the EU after the European Commission began to impose duties on various American products. The EU took a response to the introduction of import duties in the United States on the import of European steel and aluminum in the amount of 25% and 10%, respectively.
Earlier, Donald Trump instructed his administration to additionally draw up a list of Chinese goods worth $ 200 billion, for which duties will be introduced. Trump accuses China of violating intellectual property rights and technology theft, as well as in disproportionate import duties and restrictions on the importation of American goods into the country.
China immediately reacted to Washington's actions, saying that "if the US side completely lost the mind and published a new list, the Chinese side will be forced to take comprehensive quantitative and qualitative measures and give a decisive respond".
In both cases, import duties in the United States and China come into force on July 6.
On Sunday, US President Donald Trump called on all countries that have established artificial trade barriers and duties to eliminate them. "The United States insists that all countries that have established artificial trade barriers and duties on goods coming to them, eliminate these duties and barriers, otherwise they will face more than reciprocity from the United States", he wrote in his Twitter.
Investors are worried about the increasing deterioration of trade relations in the world. According to the Bank of America Merrill Lynch, over the last week, investors have withdrawn the largest since 2016, the volume of funds from equity funds, financial instruments and bonds of investment grade emerging markets.
Shares of industrial, agricultural and automotive companies fell last week. DJIA on Thursday finished with losses eighth consecutive session. This is the longest such series in more than a year.
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Support levels: 24425.0, 24050.0, 23800.0, 23120.0, 22450.0
Resistance levels: 24800.0, 25400.0, 25750.0, 26200.0, 26620.0
Trading Scenarios
Buy Stop 24700.0. Stop-Loss 24300.0. Take-Profit 24800.0, 25400.0, 25750.0, 26200.0, 26620.0
Sell Stop 24300.0. Stop-Loss 24700.0. Take-Profit 24050.0, 23800.0, 23120.0, 22450.0
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