The Dow Jones soared as a fresh trade deal ignited investor risk appetite

The Dow Jones surged to its highest level in nearly six weeks at the start of Monday’s US session, building on a strong gap-higher open in Asia and advancing around 1.3% since then.

The rally was fueled by a new trade deal between the US and China, which eased market anxiety after weeks of volatility driven by fears of a global trade war and its potential negative impacts.

Investor sentiment improved as the US secured agreements with several key partners, including Japan, South Korea, India, and the United Kingdom. The landmark deal with China, the world’s second-largest economy, further boosted confidence in global economic growth.

The Dow is on track for its fourth consecutive week of gains, pushing above the weekly cloud top (42,096) and currently testing the converged 100/200 DMAs (42,356) on the daily chart.

While fading bullish momentum may cause some hesitation around current levels, strong positive sentiment is likely to keep bulls in control. Any pullbacks are expected to be shallow, presenting buying opportunities rather than signaling a correction.

Key support levels to watch include 41,797 (broken 61.8% Fibonacci of 45,024/36,496) and 41,600 (session low), with further support at 41,257 (55DMA) and 41,141 (10DMA).

Res: 42356; 42570; 42834; 43050
Sup: 41960; 41600; 41257; 41141