Dow Jones Weekly Forecast – DJIA Back on Long Term Uptrend on US-China Optimism
U.S. equity markets are gapping higher with Dow Jones retesting resistance after renewed optimism from U.S.-China trade negotiations.
Quick overview
- U.S. equity markets are experiencing a rally, with the Dow Jones testing critical resistance levels after positive U.S.-China trade negotiations.
- The Dow Jones Industrial Average ended the week slightly down, indicating market indecision as it approaches the 50-week Simple Moving Average.
- Recent trade talks between U.S. and Chinese officials have been described as productive, boosting investor sentiment and leading to a rise in Dow futures.
- The market outlook remains uncertain, hinging on the details of the trade agreement and its potential impact on the Dow's ability to break through resistance.
U.S. equity markets are gapping higher with Dow Jones retesting resistance after renewed optimism from U.S.-China trade negotiations.
Equity Rally Pauses at Key Technical Levels But Retest Resistance
The Dow Jones Industrial Average (DJIA) concluded the week with a marginal decline of 0.16%, reflecting a broader market hesitation after weeks of gains. Technical indicators suggest that the DJIA is testing critical resistance near the 50-week Simple Moving Average (SMA), currently around 41,790 points. The formation of a doji candlestick on the weekly chart indicates market indecision, often a precursor to potential trend reversals.
D0w Jones Chart Weekly – DJIA Will Gap Above the 50 SMA Tomorrow 
Despite Friday’s subdued trading, the market’s recent performance underscores a period of consolidation, as investors assess the sustainability of the rally that began post the early April crash. The DJIA’s inability to surpass the 50-week SMA raised questions about the continuation of the bullish trend without new catalysts, however the positive trade news over the weekend is giving buyers more reason and they’re retesting the 50 weekly SMA again right now.
Positive Signals from U.S.-China Trade Talks
Over the weekend, U.S. and Chinese officials concluded intensive trade discussions in Geneva, marking a significant step toward resolving ongoing trade tensions. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer described the talks with Chinese Vice Premier He Lifeng as “productive,” leading to an agreement on establishing an economic and trade consultation mechanism for continuous dialogue.
President Donald Trump characterized the negotiations as a move toward a “total reset” of U.S.-China relations, emphasizing the potential for China to open its markets further to American businesses . While specific details of the agreement remain forthcoming, the progress has been sufficient to boost investor sentiment, with Dow Jones futures rising nearly 400 points in response.
US President Donald Trump’s Tweet
Market Outlook: Awaiting Confirmation
The intersection of technical resistance and positive geopolitical developments places the market at a crossroads. Should the U.S.-China trade agreement materialize with substantive terms, it could provide the impetus needed for the DJIA to break through current resistance levels and resume its upward trajectory.
Conversely, if the agreement lacks depth or fails to address core issues, the market may interpret it as insufficient, potentially leading to a retracement. Investors are advised to monitor upcoming announcements closely, as they will likely influence market direction in the near term.
Dow Jones Live Chart
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