Dow Jones Technical Analysis | Forexlive

Last Friday, the Dow Jones finished the day
basically unchanged after the release of two key economic reports. The US NFP report
beat expectations, with the market initially trimming rate cuts expectations
and spiking downwards, but after a couple of minutes, the price reversed as
under the hood the data wasn’t as good as it seemed. Sometime later, we got the
release of the ISM Services PMI and
that’s where the real shocker came from.

Besides the data missing across the board, the
employment sub-index cratered to levels seen only in the dot-com recession, the
global financial crisis and the covid recession. Although the market might keep
on cheering about the upcoming rate cuts, these are bearish signals and they
are coming right around the stock market highs, so the bulls should start to
get extra careful going forward.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones last
Friday finished the day basically unchanged. 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 uptrend has been supported by the trendline but
the price recently broke below it signalling a bigger 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 we can notice that the price is struggling
at a minor downward trendline as the sellers are probably leaning on it to
position for a drop into the 37066 support with a break lower as the ultimate
target. The buyers will need the price to break above the trendline and the
most recent lower high around the 37620 level to regain some control and
position for new highs.

Upcoming Events

This week is basically empty on the data front with the
only two notable releases scheduled for Thursday when we will get the US CPI
report and the US Jobless Claims figures.