as the correction that began last week seems to have more room to go. As of
now, the data has been overall positive with the US ISM Manufacturing PMI beating
expectations and US Job Openings missing
forecasts. Moreover, yesterday we got a beat in the US ADP and US Jobless Claims data. If
the data remains positive, we can expect the market to bounce back once the
froth from the aggressive rate cuts expectations gets unwound. Today, is an
important day as we get the release of the US NFP and the US ISM Services PMI.
Dow Jones Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones remains
in a negative mood amid a general stock market selloff. The level to watch is
the support around
the 37066 level where we can find the confluence of the
recent swing low and the 21 moving average. This is
where we can expect the buyers to step in with a defined risk below the support
to position for new highs. A break below the support would open the door for a
bigger drop into the 36030 level.
Dow Jones Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the
Dow Jones has been trading inside a rising channel but the price recently broke
out of it signalling a deeper correction to follow. We can also notice that the
latest leg higher diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. If the price breaks below the 37066 level the reversal would be
confirmed and the 36030 level will be the next target.
Dow Jones Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more
closely the current price action and the divergence with the MACD. Now it’s
just about waiting for the price to come into the 37066 support and see what
happens there as it’s likely to decide the direction for the next few weeks.
This article was written by FL Contributors at www.forexlive.com.