Dow Jones Technical Analysis

The Dow Jones surged to new highs following the
miss in the US CPI report.
Looks like the market is still trading based on the inflation and interest
rates expectations and ignoring the softening in the labour market and growth
data. Yesterday, the US Retail Sales were
more tepid compared to the prior months, but they still came out better than
expected, and the US PPI data
missed forecasts by a big margin across the board. The bears are having a hard
time to fight this positive sentiment and perhaps it will take a clear uptrend
in the unemployment rate to switch the market’s focus.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones surged
into the key resistance at 35000
following the miss in the US CPI report. This rally looks a bit overstretched
as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. The sellers are likely to step in around
this resistance to position for a drop back into the 34000 level.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that in case of a
pullback, the buyers might lean on the upward trendline where
they will find the blue 8 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking below the
trendline to increase the bearish bets into the 34000 support.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price is diverging with
the MACD right
at the key resistance level. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it might be another
signal for an imminent pullback. Moreover, we can see that the buyers will also
find the 38.2% Fibonacci
level for confluence around the trendline.

Upcoming Events

Today the market’s focus will be on the latest US
Jobless Claims figures given the recent softening in the labour market data.

This article was written by FL Contributors at

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