Last week the Fed kept interest rates unchanged as
expected while striking a hawkish tone via the Dot Plot. In fact, the Fed not
only sees another rate hike by the end of the year, but also much less rate
cuts by the end of 2024. Fed Chair Powell has also
admitted that the soft-landing scenario is not his base case at the moment and
stronger than expected economic data may require additional tightening. For
now, the economic data remains strong with Jobless Claims crushing
expectations last week, which is not what the Fed wants to see.
Dow Jones Technical
Analysis – Daily Timeframe
Dow Jones Daily
On the daily chart, we can see that the Dow Jones
eventually broke out of the key trendline
following the FOMC meeting and it’s now eyeing the 33622 support. The
sellers remain in control as the price keeps printing lower lows and lower
highs and the moving averages are
crossed to the downside. The price is a bit overstretched though as depicted by
the distance from the blue 8 moving average. In such instances, we can
generally see a pullback into the moving average or some consolidation before
the next impulse.
Dow Jones Technical
Analysis – 4 hour Timeframe
Dow Jones 4 hour
On the 4 hour chart, we can see that the price
closed below the previous low on Friday which keeps the bearish bias intact,
but the sellers might want to wait for a pullback before positioning again for
further downside. If we do get a bounce around this level, we should see the
price finding resistance around the 34300 level.
Dow Jones Technical
Analysis – 1 hour Timeframe
Dow Jones 1 hour
On the 1 hour chart, we can see more
closely the bearish setup with the support turned
resistance around the 34300 level where we have the confluence with
the Fibonacci
retracement levels and the red 21 moving average.
This is where we can expect the sellers to pile in with a defined risk above
the resistance and target the 33622 support.
Upcoming Events
This week is pretty bare on the data front with just a
couple of notable economic releases. Tomorrow, we will get the latest US
Consumer Confidence report while on Thursday we will see again the US Jobless
Claims data. On Friday, we conclude the week with the US PCE data.