Dow Jones Technical Analysis – The bears remain in control

This week started like the last one with a broader
rally in the markets as the risk sentiment got supported by another lack of a
ground operation in Gaza over the weekend and the positive news about a couple
of hostages being released. Yesterday, on the other hand, we got the complete
reverse with the Dow Jones opening lower and selling off for no apparent reason
except a reaction to some key resistance levels. The selloff accelerated in the
evening as the Israeli PM Netanyahu said
that they were preparing for a ground invasion. Will we see another selloff
into the weekend?

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that after a brief
bounce at the start of the week, the Dow Jones yesterday began to fall again.
The sellers are eyeing the 32597 level at the moment as the risk sentiment remains
negative. That’s where we can expect the buyers to step in with a defined risk
below the level to position for a rally back into the trendline around
the 34000 level.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that there’s not
much to glean from this timeframe. The buyers might want to step in already at
the equal lows but in the current context, there’s a high chance that the Dow
Jones continues to fall into the weekend.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price yesterday rejected the resistance around
the 33265 level where we had the confluence with
the trendline and the 38.2% Fibonacci
level. The buyers will want to see the
price breaking above the trendline to gain more confidence and pile in to
target a rally into the 34000 resistance.

Upcoming Events

Today, we will see the US Jobless Claims data with
the market likely focusing on the Continuing Claims figures as they’ve been
recently showing some softness. The market may not like bad data given the
fragile risk sentiment. Tomorrow, we will get the US PCE report, which is not
expected to change anything for the Fed at this point in time.

This article was written by FL Contributors at

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