after 14 consecutive beats. The miss was very slight though and the other
details in the report were good, so in the end it showed that the labour market
is still solid even though there may be some minor softening. The market
rallied initially but eventually sold off into the close as the US CPI started
to be the next focus. The jobs data on Friday hasn’t changed the market pricing
for the upcoming FOMC meeting as the market still expects the Fed to hike by 25
bps. The data on Wednesday will decide the next big move for the market.
Dow Jones Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones
couldn’t sustain the breakout above the 34477 resistance again
and eventually sold off into a previous support. The price has also fell below
the red 21 moving average and the
moving averages have crossed to the downside. This is a bearish signal, and the
target should now be the support at 32684.
Dow Jones Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is
now at the previous support level at 33885 where we can expect at least a
bounce into the red 21 moving average where the sellers are going to step in
again. If the price keeps falling below the support though, the sellers should
pile in even more aggressively as the bearish momentum would be high at that
point and lead to a selloff into the 33448 support where we can also find the
61.8% Fibonacci retracement level.
Dow Jones Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the
price is now diverging with
the MACD right
at the support level. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, if we get a pullback, the
price is likely to rally towards the previous swing high level at 34200 where
we can also find the 38.2% Fibonacci retracement level for confluence.
That’s where we can expect the sellers
piling in to position for more downside with a defined risk above the
resistance zone. The buyers, on the other hand, can either enter here at the
support level with a defined risk below the support or wait for the price to
take out the swing high level to pile in and extend the rally towards the
previous high at 34700.
Upcoming Events
This week
everyone will be focused on the US CPI report scheduled for Wednesday as it
will likely decide the next big move for the market. A miss in the data,
especially on the core figures, should lead to a rally in the Dow Jones, while
a beat should weigh on risk sentiment and bring the market even lower. After
Wednesday, we will have the US Jobless Claims report on Thursday and the
University of Michigan Consumer Sentiment survey on Friday.
This article was written by FL Contributors at www.forexlive.com.