Dow Jones Technical Analysis

<p>On the daily chart below, we can
see that the sellers eventually managed to break below the key <a target=“_blank“ href=““>support</a> level at 32684. The recent
breakout was caused by the collapse of the <a target=“_blank“ href=““>Silicon
Valley Bank</a> on Friday which spread fears of contagion in the
banking system and led to risk aversion across the board. </p><p>The Treasury and the Fed worked
during the weekend on a solution for this particular matter and came up with an
<a target=“_blank“ href=““>emergency
lending facility</a> that would protect the depositors and give the
banks the chance to convert their long term securities at original value
instead of being marked to market. This development pushed the markets up as
the futures market reopened and the price rallied all night long. </p><p>On the 4 hour chart below, we can
see that the overnight rally stalled at the red long period <a target=“_blank“ href=““>moving
average</a> and the <a target=“_blank“ href=““>trendline</a>. This is a zone where the
sellers may be leaning on and the key <a target=“_blank“ href=““>resistance</a> at 32684 offers a good
protection for shorts. The buyers will need to break above the 32684 level if
they want to gain control and target the major trendline as the first target. </p><p>What comes next though, should be
decided by the CPI report tomorrow. The market is currently pricing a <a target=“_blank“ href=““>higher
chance of 25 bps hike</a> at the March meeting and completely priced out the
50 bps chance. A beat across the board in the data may raise odds of the 50 bps
hike and push the market lower, while a miss should give the buyers lots of
strength to push higher and make new higher highs. </p><p>In the 1 hour chart below, we can
see that the resistance zone at 32684 is pretty strong. We have <a target=“_blank“ href=““>confluence</a> of the trendline, the 61.8% <a target=“_blank“ href=““>Fibonacci
retracement</a> level and the above-mentioned resistance. This
will be the first line of defence for the sellers. If the buyers break above,
the sellers may want to wait for the price to approach the major trendline
first before starting to pile in. </p>

This article was written by ForexLive at

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