Dow Jones technical analysis – It is becoming more and more obvious that the market is interpreting the weaker labor market statistics favorably for inflation and the soft landing scenario. In reality, leading up to the NFP report last week, we experienced a number of significant misses, but the US Jobless Claims data revealed that the labor market is still stable, and the NFP exceeded expectations. A rise in the participation rate and an unexpected decrease in average hourly earnings were also seen along with the increase in the jobless rate, which is excellent news for inflation. Since the market no longer believes that the Fed will raise interest rates, rate cuts could be the next move.
Technical Analysis of the Dow Jones Index for the Day
The Dow Jones has recovered all the way back to the level that served as support but is now resistance on the daily chart, around the 35000 mark. As sellers enter the market more forcefully with a defined risk above the resistance level in an effort to reach the 33805 level, the price is now battling to break through. For the buyers to begin aiming for the record high, the price must overcome the barrier.
Dow Jones Technical Analysis – Four-hour Timeframe
On the 4 hour chart, we can see that the price printed a lower low and the moving averages crossed to the downside as a result of the rejection from the 61.8% Fibonacci retracement level. This may be a precursor to the trend actually turning and the arrival of new lows. However, to confirm the reversal and give the sellers more conviction for another selloff, the price must breach the 34700 support level.
Technical Analysis of the Dow Jones Index for One Hour
On the one-hour chart, we can see that we experienced a divergence with the MACD exactly around the resistance, which is typically a sign of waning momentum and is frequently followed by pullbacks or reversals. Price may be creating a descending triangle at this time, and a break on either side of the pattern typically signals a significant move. As a result, it could be wiser to hold off on opening fresh positions until a breakout occurs.
Events that will soon occur
The only two scheduled data releases this week are the US ISM Services PMI on Wednesday and the US Jobless Claims on Thursday. In recent weeks, the market has demonstrated remarkable resistance to poor data, making it difficult to determine how much worse the data must be to cause a decline. The US Jobless Claims data has been fairly steady, so figures that are worse than anticipated could cause a selloff.
