Dow Jones Technical Analysis

The Dow Jones managed to hold into the last week
gains and consolidated near a key resistance as the first part of the week
didn’t offer any meaningful catalysts. The things should change today though as
we will see the latest US Jobless Claims data and given the recent weakness in
the labour market data, the market is likely to react strongly to this report.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones erased
all the losses of the past couple of weeks and it’s now consolidating around a
key resistance where we
can find the confluence with the
trendline and the
61.8% Fibonacci retracement level.
This is where the sellers are likely to pile in to position for a selloff into
new lows with a great risk to reward setup.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
bearish setup with the key resistance highlighted by the blue box. The price in
the first part of the week managed to break the high but erased the gains soon
after. The buyers are likely piling in here with a defined risk below the
trendline to position for another rally into the 35000 level. A break below the
trendline should invalidate the bullish setup and confirm the bearish one.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
recent price action is diverging with
the MACD right
when we are at a key resistance. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, we got a pullback into
the previous higher low, but if the price breaks below it, the reversal would
be confirmed, and it would be another bearish confluence for the sellers.

Upcoming Events

Today we have the US Jobless Claims on
the agenda, while tomorrow it will be the time for the University of Michigan
Consumer Sentiment report. The market is likely to focus on the US Jobless
Claims given the recent weakness in the labour market data. Weak figures are
likely to weigh on sentiment and push the Dow Jones lower, while good readings
might be enough for the market to rally.

This article was written by FL Contributors at

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