following the surprisingly dovish FOMC decision where
the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell
delivered some dovish comments. In the last part of the week, we got a slate of
soft-landing data as the US Jobless Claims and Retail Sales beat
expectations, while the US PMIs missed on the manufacturing side and beat on
the services one.
Dow Jones Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones last
week surged to a new all-time high following the dovish FOMC decision. The
rally since the end of October has been pretty insane with very shallow
pullbacks which points to either a short squeeze or lots of FOMO. Waiting for
pullbacks didn’t provide any opportunity, but chasing such rallies is generally
a bad idea as they can reverse most of the gains once a negative catalyst hits
the market.
Dow Jones Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from
a risk management perspective, the buyers would be better off leaning on the trendline where
they will find the confluence with
the previous all-time high level and the red 21 moving average. The
sellers, on the other hand, will want to see the price breaking below the
trendline to position for a drop into the 35683 level.
Dow Jones Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more
closely the current price action and we can notice that the buyers will also
find the confluence with the 38.2% Fibonacci
retracement level around the trendline. This makes it
a strong support zone where the buyers will lean onto to position for another
rally while the sellers will want to see the price breaking lower to invalidate
the bullish setup and target new lows.
Upcoming Events
This week is a bit empty on the data front as we head
into the Christmas holidays. On Wednesday, we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims data, while on Friday
we conclude the week with the US PCE report.
This article was written by FL Contributors at www.forexlive.com.