Last week, the market remained under pressure as
the more hawkish than expected FOMC dot plot was
still fresh in everyone’s mind. The economic data continues to support the
soft-landing narrative with Jobless Claims showing
a solid labour market and Core PCE trending
downwards. The last day of the week, we got a small bounce across the board as
the market took a breather after the heavy selloff after the FOMC meeting. We
will see if it was just a pullback or the start of a new rally.
Dow Jones Technical
Analysis – Daily Timeframe
Dow Jones Daily
On the daily chart, we can see that the Dow Jones
bounced around a key support at the
33622 level and pulled back into the blue 8 moving average before
falling back into the support. The sellers would have undoubtedly a better risk
to reward setup if the price rallied all the way back into the downward trendline where we
can also find the 61.8% Fibonacci retracement level.
For now, the sellers remain in control and the buyers will need to break some
key levels before turning the trend around.
Dow Jones Technical
Analysis – 4 hour Timeframe
Dow Jones 4 hour
On the 4 hour chart, we can see that we have a
strong resistance around the 34000 level where we have also the confluence with the
red 21 moving average and the 38.2% Fibonacci retracement level. If the price
rallies into that resistance again we can expect the sellers stepping in with a
defined risk above the resistance to target the 32597 level. The buyers, on the
other hand, will want to see the price breaking higher to position for a rally
into the trendline.
Dow Jones Technical
Analysis – 1 hour Timeframe
Dow Jones 1 hour
On the 1 hour chart, we can see that the
Dow Jones seems to be consolidating around the 33622 support and we can expect
the buyers to keep piling in around here with a defined risk below the low to
target the trendline. If the price breaks below the low, the sellers should
jump onboard and ride the selloff into the next support around the 32597 level.
Upcoming Events
This week we have many key economic releases that will
culminate in the NFP report on Friday. Today, we will see the latest ISM
Manufacturing PMI. Tomorrow, we will have the Job Openings data which led to a
strong rally the last time as the big miss was interpreted as a good thing due
to less labour market tightness and less hawkish Fed. On Wednesday, it will be
the time for the ADP report and the ISM Services PMI. On Thursday, we will see
the Jobless Claims data, which continues to show a solid labour market. Finally
on Friday, it will be the time for the NFP report which is the only one the Fed
will see before its next rate decision.