maintaining an impressive streak of 14 consecutive beats on the headline number.
However, a closer examination of the report’s specifics reveals a less
remarkable picture. The unemployment rate experienced a significant jump from
3.4% to 3.7%, representing the largest month-over-month increase since the
beginning of the pandemic. Additionally, there was a slight decline in average
workweek hours, often signalling employers‘ inclination to reduce hours before
implementing layoffs.
Considering all factors,
this report offered something to satisfy different perspectives. The optimists
drew a positive outlook from the solid job growth, while the higher
unemployment rate and soft average hourly earnings suggested a decrease in
labour market tightness, potentially easing inflationary pressures. Some participants
may interpret the lower average weekly hours worked as a reversion to the
pre-pandemic trend.
On the contrary, the
pessimists focused more on the report’s details rather than the headline
number, recognizing that the trend holds greater significance than the absolute
figure.
Dow Jones Technical
Analysis – Daily Timeframe
On the daily chart, after bouncing from the key
32684 support, the Dow
Jones broke above the downward trendline and
extended the rally towards the swing high at the 33850 level. The moving averages are
about to cross to the upside, possibly signalling an imminent change in trend. If
the buyers manage to maintain the bullish momentum, the resistance at 33477
will be the natural target.
Dow Jones Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can see that the price
overextended a bit as depicted by the distance from the blue 8 moving average.
Generally, in such cases, the price consolidates or pulls back toward the
trendline to find a new equilibrium before the next move. This overextension comes
right when the Dow Jones is at the swing high resistance at 33854, which should
raise the probabilities of a pullback. The sellers are likely to pile in at
this swing high resistance with a tight stop just above it to target the 33300
support.
Dow Jones Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that a
good spot for new longs for the buyers would be the 33625 level. In fact, we
can find the confluence with
the 38.2% Fibonacci
retracement level, the red 21 moving average and an
upward trendline there. If that support zone fails, the buyers are likely to
retry at the 33300 level where there’s the confluence of the previous resistance turned
support and the broken downward trendline. The sellers, on
the other hand, will pile in at every downside breakout.
The market today is likely
to focus on the US ISM Services PMI report:
–
Given the impressive performance of the S&P Global
Services PMI in the previous month, there may be an anticipation for a favourable
outcome in the ISM report. If the data surpasses expectations, especially if
the prices paid sub-index indicates a lower value, we could witness a rally in
the Russell 2000 as market participants would expect a soft landing scenario.
–
Conversely, if the data disappoints expectations, it
could trigger market weakness, potentially leading to the above-mentioned
pullback or even a complete reversal.
This article was written by ForexLive at www.forexlive.com.