On the back of two consecutive weeks of decline and after witnessing a choppy week on the back of the FOMC statement, all the major US equity indices are poised for a weekly gain. Although the Federal Reserve dropped the phrase "patient" from its monetary policy statement, the US equity markets are enjoying the central banks dovish economic outlook.
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Given the backdrop, here is a technical update for important US equity indices, namely - Dow Jones Industrial Average, S&P 500 and Nasdaq 100.
Dow Jones [DJI30]
As is visible on 4-hourly chart, the index is currently trading within a short-term ascending trend-channel, indicating the possibilities of further up-move from current levels. Hence, a sustained move above 18,100 now seems to trigger the required momentum to lift the index back towards 18,280-300 immediate resistance, the recent highs tested during early March, and eventually towards 18,580-18,600 resistance area marking the upper trend-line resistance of the short-term ascending channel. However, should the index fail to clear 18,100 resistance and drop back below 17,920-900 immediate support, it could possibly drop back towards testing the lower trend-line support of the channel, currently near 17,700 level. Further, a break below 17,000 mark and a subsequent drop below March lows support near 17,660-50 zone now seems to accelerate the downfall towards 17,300-280 support area.
S&P 500 [SP500]
Similarly, the S&P 500 remains in an up-trend and is now very close to its recent highs resistance near 2120-25 zone. A move above recent highs is likely to confront immediate resistance near 2160-70 area, marked by the upper trend-line resistance of a well-established ascending trend-channel formation on weekly chart. Alternatively, reversal from 2100 mark and a subsequent break below 2050-40 immediate support now seems to trigger some near-term corrective move immediate towards 2000 psychological mark support and eventually towards a very important support near 1970 region, marking 2015 lows. Furthermore, on decisively breaking below 2015 lows the index might witness some additional near-term weakness towards testing another strong support near 1925-20 area, representing the lower trend-line support of the channel.
Nasdaq 100 [NQ100]
This week, the index has outperformed the other two major indices and is now within striking distance of re-testing the record high levels. A move above its recent highs now seems to provide the required boost for the index to continue its appreciating move towards testing 61.8% Fib. expansion level resistance near 4530 area. On the downside, 4440-20 area now seems to protect immediate downside, which if broken could drag the index further towards 4360-40 support area and eventually towards 4300 strong support area, marked by 50-day SMA. Failure to hold immediate support levels and a subsequent drop below 50-day SMA might trigger an extended corrective move towards testing the very important psychological mark support near 4010-4000 zone.
Senior Market Analyst
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