<p class=“MsoNormal“>In terms of technical analysis for the Dow Jones, the <a target=“_blank“ href=“https://www.forexlive.com/news/us-december-non-farm-payrolls-223k-vs-200k-expected-20230106/“ target=“_blank“ rel=“follow“>NFP</a> and the <a target=“_blank“ href=“https://www.forexlive.com/news/ism-december-us-services-496-vs-550-expected-20230106/“ target=“_blank“ rel=“follow“>ISM
Services PMI</a> reports on Friday gave the market the ultimate
push to break the resistance zone that was keeping the market in a rangebound price
action since Christmas holidays. </p><p class=“MsoNormal“>Moreover, <a target=“_blank“ href=“https://www.forexlive.com/centralbank/powell-we-need-to-stick-to-our-mandate-20230110/“ rel=“follow“>Fed
Chair Powell</a> on Tuesday didn’t touch on monetary policy or
recent economic data, leaving the market free to move on its own
expectations.</p><p class=“MsoNormal“>The <a target=“_blank“ href=“https://www.forexlive.com/centralbank/jp-morgan-are-forecasting-lower-than-expected-us-cpi-data-on-thursday-stocks-higher-20230111/“ target=“_blank“ rel=“follow“>US
CPI report on Thursday</a> will be an important event for the market. Another
miss should keep the bullish bias intact as the market will expect the Fed
to hike by 25 bps and pause earlier than expected. </p><p class=“MsoNormal“>A beat shouldn’t bode well for the
sentiment and
raise the odds of another 50 bps hike with the market probably falling going
into the February FOMC meeting.</p><p class=“MsoNormal“>DOW JONES (DJIA) Technical Analysis</p><p class=“MsoNormal“>In the daily chart above, we can
see that the price managed to break up and it’s now testing the old <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> turned <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>. If the market maintains the
bullish bias and the US CPI on Thursday misses expectations, we can expect
another bullish run to the upside targeting the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> zone around the 35000 price
level. </p><p class=“MsoNormal“>In the 1-hour chart above, we can
see more closely how the price broke out of the 2 weeks long range after the
NFP and ISM Services PMI reports. The price then pulled back to test the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>resistance</a> now turned <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>support</a> and bounced from it as Fed Chair
Powell didn’t offer anything bearish for the market. </p><p class=“MsoNormal“>Zooming in to the 15 minutes
chart, we can see that the recent move to the upside lacks momentum as you
can see from the price <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“ target=“_blank“ rel=“follow“>divergence</a> with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-relative-strength-index-rsi-20220426/“ target=“_blank“ rel=“follow“>RSI</a>. The price should now pullback
again to the support zone and then two different scenarios may play out: </p><p class=“MsoListParagraphCxSpFirst“>·
The price bounces and starts again its bullish run.
</p><p class=“MsoListParagraphCxSpLast“>·
The price breaks down and starts a fall into the US
CPI report.
</p>
Services PMI</a> reports on Friday gave the market the ultimate
push to break the resistance zone that was keeping the market in a rangebound price
action since Christmas holidays. </p><p class=“MsoNormal“>Moreover, <a target=“_blank“ href=“https://www.forexlive.com/centralbank/powell-we-need-to-stick-to-our-mandate-20230110/“ rel=“follow“>Fed
Chair Powell</a> on Tuesday didn’t touch on monetary policy or
recent economic data, leaving the market free to move on its own
expectations.</p><p class=“MsoNormal“>The <a target=“_blank“ href=“https://www.forexlive.com/centralbank/jp-morgan-are-forecasting-lower-than-expected-us-cpi-data-on-thursday-stocks-higher-20230111/“ target=“_blank“ rel=“follow“>US
CPI report on Thursday</a> will be an important event for the market. Another
miss should keep the bullish bias intact as the market will expect the Fed
to hike by 25 bps and pause earlier than expected. </p><p class=“MsoNormal“>A beat shouldn’t bode well for the
sentiment and
raise the odds of another 50 bps hike with the market probably falling going
into the February FOMC meeting.</p><p class=“MsoNormal“>DOW JONES (DJIA) Technical Analysis</p><p class=“MsoNormal“>In the daily chart above, we can
see that the price managed to break up and it’s now testing the old <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> turned <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>. If the market maintains the
bullish bias and the US CPI on Thursday misses expectations, we can expect
another bullish run to the upside targeting the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> zone around the 35000 price
level. </p><p class=“MsoNormal“>In the 1-hour chart above, we can
see more closely how the price broke out of the 2 weeks long range after the
NFP and ISM Services PMI reports. The price then pulled back to test the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>resistance</a> now turned <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>support</a> and bounced from it as Fed Chair
Powell didn’t offer anything bearish for the market. </p><p class=“MsoNormal“>Zooming in to the 15 minutes
chart, we can see that the recent move to the upside lacks momentum as you
can see from the price <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“ target=“_blank“ rel=“follow“>divergence</a> with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-relative-strength-index-rsi-20220426/“ target=“_blank“ rel=“follow“>RSI</a>. The price should now pullback
again to the support zone and then two different scenarios may play out: </p><p class=“MsoListParagraphCxSpFirst“>·
The price bounces and starts again its bullish run.
</p><p class=“MsoListParagraphCxSpLast“>·
The price breaks down and starts a fall into the US
CPI report.
</p>
This article was written by ForexLive at www.forexlive.com.