Dow Jones Technical Analysis

Last week, the Federal Reserve made the
decision to pause its tightening cycle, settling at a range of 5.00-5.25%.
Their rationale behind this move was a desire to gather additional economic
data before determining whether or not to proceed with further interest rate
hikes, although the pencilled two more rate hikes by the end of 2023. Their
goal is to carefully calibrate the appropriate level of monetary restraint
required to bring inflation down to the target, while minimizing any adverse
effects on the economy. Following the FOMC decision, the Dow Jones rallied, but
pulled back a bit going into the long Juneteenth weekend.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
eventually broke out of the 34477 resistance and
extended the rally towards the 34890 level. The price then pulled back on
Friday as we headed into the long Juneteenth weekend. There wasn’t any negative
catalyst though, so it might keep going up for now. The next big resistance is
the 35289 level, and a break above it, would open the door for a rally towards
the all-time high at 36832.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have some confluence at the
34477 resistance turned support. In
fact, we can find the red 21 moving average and the
upward trendline there.
The buyers should lean onto this support area to target a new higher high,
while the sellers will want to see the price breaking lower to pile in and
extend the pullback into the 34100 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
also have the 50% and 61.8% Fibonacci
levels that strengthen even more this
support zone. From a risk management perspective, the buyers have a low risk
below the support with a high reward in case the price rallies towards the
35289 resistance. The sellers, on the other hand, can only wait for a breakout
to get more conviction for a deeper pullback into the 34100 level.

This week won’t
offer much in terms of data, but it will feature remarks from several Federal
Reserve officials, including Fed Chair Powell who will be testifying before
Congress on both Wednesday and Thursday. Additionally, we have the release of
the Jobless Claims report on Thursday, followed by the US PMIs on Friday.

This article was written by FL Contributors at Source