By IFCMarkets

Better US data bullish for DJI

US economic data in the last couple of weeks were better than expected on balance. US Institute for Supply Management (ISM) report yesterday showed its manufacturing index climbed to 52.6 from 43.1 in May and from an 11-year low of 41.5 in April, when a reading of 49.5 was forecast. Any reading above 50 represents an expansion in economic activity. A day before Standard & Poor’s reported that the Case-Shiller house price index of selling price of single-family homes in 20 metropolitan areas rose 4% on an annual basis in April when a decline to 3.8% was expected after 3.9% increase in March. And while the ISM-Chicago reported Chicago area business activity contraction continued at above-expected rate in June the contraction slowed compared with May. At the same time the Automatic Data Processing Inc. reported private sector employment added 2.37 million jobs in June, and May’s statistics was revised: instead of a loss of 2.76 million jobs the US added 3.06 million jobs! And on the monetary front Federal Reserve chair Powell pledged on Tuesday to keep doing whatever it takes to support the US economy. Better than expected economic data are bullish for DJI. On the other hand Labor Department employment report will be released today and official data painting a picture weaker than the one ADP reported is an immediate downside risk for DJI.

Summary of technical analysis

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