Dow 30 Cash CFD Forecast: 300 Point Drop Likely, Yen To Strengthen?

The Dow 30 index dropped 54 points or 0.23 percent to 23,273 levels on Monday. The CFD currently trades at 23,318 levels. The technical charts suggest the index could suffer a 300 point drop this week.

US 30 Cash 4-hour chart - Bearish divergence

• Bearish price RSI divergence
• Bearish price MFI (money flow divergence) divergence
• The rising trend line is seen offering support around 23,000 levels
• The 50-MA, the 100-MA and the 200-MA are all sloping upwards and positioned well below the other in favor of the bulls.

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• A pullback to 23,000 levels is likely in a day or two.
• A sustained move below the rising trend line support would open up downside towards the 4-hour 200-MA of 22,577 levels.

Drop in Dow could boost Yen

A drop in Dow could result in a minor bout of risk aversion in the financial markets. Thus, the Yen may find bids and the Dollar-Yen pair may test demand around the rising trend line support of 112.80-112.60 levels.

USD/JPY daily chart

The trend line sloping upwards from the Sep 8 low and Oct 16 low is seen offering support around 112.60 levels. The support will shift higher to 112.80-112.90 levels by Thursday.