DJIA futures dropped 160 points as the Pound sterling dived against the U.S dollar

The strength of the U.S dollar continues to build globally which put other major currencies under bearish pressure. Today, the Pounsterling falls nearly 4% against the U.S dollar. It almost reached the parity level as the UK government doubled down on tax-cut. We might see the stock market trading bearishly as recession also looms.

Under the current situation, traders will assess which companies have strong fundamentals to survive the bear market and start growing again when the bear market passed.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index printed a new lower low on the daily chart which means the trend will continue bearish. If the index starts a bullish correction then traders will observe the formation of a new lower high at around the 31,000 handles. Despite the situation, we think a bullish bounce could happen based on the weekly chart.

On the lower side, there is a support range between 28,000 – 29,000. Traders will monitor closely the index reactions near the area.

Automatic Data Processing (ADP)

ADP share prices traded lower after reaching the $261.59 high. The share prices situation is currently bearish and set to test the daily SMA 200. If the share prices could maintain the positions above the level then there is a chance of a bullish reversal. However, if a major bearish close below the averages happens then we might see a bearish continuation.