The US 30 stock index futures pulled away from seven-week highs above 18000 to find support around the 17850 level. Further declines could see the index fall back into the Ichimoku cloud and the next support could come around the 17700 level. A break below this key level would neutralize the current positive bias, which has weakened after two days of losses.
The weakened momentum is highlighted by the RSI having dipped sharply downwards. However, it remains above 50 and the MACD is also in positive territory. The upside momentum is further supported by the positively aligned tenkan-sen and kijun-sen lines so further gains in the near term are possible.
A rebound could see the index test the 18000 level again and beyond that, the April 20 high of 18078 comes in focus. A break above this level (a 2016 high) would put the index on track towards the all-time high of 18328.50 set back in May 2015.
The medium term outlook remains bullish with the index trading above the rising 50- and 200-day moving averages.
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