Current trend

Since the Federal Reserve decided to keep interest rates unchanged, stock indices have been declining. Yesterday, DJIA ended down by 0.3% to 16280 and S&P500 lost 0.2%.

Ahead of the Fed's Chair Janet Yellen Speech, American indices continue declining: investors are shifting their funds to the Yen and gold. Concerns over China's slowdown negatively affect the chances of a rate rise in the US and push stock indices down. Nevertheless, some Fed officials think the US economy growth is stable enough for a hike. Thus, US stock indices may resume growing in the long term.

Support and resistance

On the 4-hor chart, OsMA and Stochastic recommend short positions. At the start of the week, the price rebounded down from the strong resistance levels of 16755 (ЕМА200), 16655 (50.0% Fibonacci correction), 16600 (ЕМА144 on the 4-hour chart) and broke down the lower line of the triangle at 16420 (38.2% Fibonacci correction). On the 4-hour chart, the price is declining within the range with the lower border at the support level of 16030, after the breakdown of which it may move towards 15575, 15250 (year lows). The breakout of the resistance levels of 16600, 16755 (with appropriate indicators signals) would allow the pair to grow to 17400 (ЕМА200 on the daily chart) and 17750 (August highs).

Support levels: 16165, 16090, 16030.

Resistance levels: 16420, 16600, 16655, 16755.

Trading tips

Place SellStop order at 16160 with targets at 16090, 16030, 15910 and stop-loss at 16300.

Long positions become valid after the consolidation above the level of 16760.

YM (DJIA): week of decline

YM (DJIA): week of decline




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