US stock rally takes a breather ahead of upcoming G-20 meeting

The Dow Jones Industrial Average finished the day slightly lower on trade concerns but is still on pace for its best week in two years.  Stocks traded broadly lower after The South China Morning Post reported that the administration’s trade hawk, Peter Navarro would attend the Trump-Xi dinner.  Navarro, a hardliner on China originally was sidelined for the meeting after clashing with Trump’s top economic advisor Larry Kudlow.

US stocks did rebound off session lows after the Wall Street Journal reported that Washington would hold off on further tariffs and the two sides would discuss big changes in Chinese economic policy under the deal.  Current expectations heading into the G-20 are for no major breakthroughs, but maybe a truce amongst White House and China.  The US dollar was saw limited moves against most of its major trading partners.

Healthcare stocks continue shine almost doubling the performance of the broader market.  During the tech collapse over the past two months, some money managers shifted into more defensive plays, such as healthcare and consumer staple stocks.

Price action on the 30-stock index shows that the recent rally is tentatively finding resistance from both the 50- and 100-day Simple Moving Averages.  If we continue to see softness, initial support may come from the 25,070 level, with major support coming from the 24.750 level.  If the Dow is able to rise and take out the psychological 26,000 level, key resistance will come from the 26,750-27,000 zone.

 

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya