The Dow Jones this week held into last week’s gains
as the lack of economic releases and the Thanksgiving Day holiday contributed
to a steady risk sentiment. On the data front, the US Jobless Claims on
Wednesday beat expectations across the board, which is a good thing for the
market at the moment given some recession fears, although one beat after a
series of misses doesn’t change the trend. Today, all eyes will be on the US
PMIs, but given the early closure for Black Friday we might not see much
movement, unless the data surprises.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones is
approaching the cycle high around the 35600 level. This rally continues to be
supported more by the FOMO rather than some strong fundamental driver. We could
see some profit taking around these levels which would finally give a decent
pullback.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price is diverging with
the MACD right
as it approaches the cycle high. This is generally a sign of weakening momentum
often followed pullbacks or reversals. In this case, it might be another hint
that we could see at least a pullback very soon.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see even
better the divergence with the MACD which has been going on since the break
above the key resistance around
the 34000 level. The buyers are likely to lean on the trendline and
the red 21 moving average to
target the cycle high. The sellers, on the other hand, will want to see the
price breaking lower to pile in and target first the low around the 34800 level
and upon a further break, the support at 34000.

This article was written by FL Contributors at www.forexlive.com.