Dow Jones Technical Analysis

Yesterday, the Dow Jones ended the day around the
highs as the market continues to look through the beat in the US CPI report.
As previously mentioned, the path of least resistance looks to be to the upside
as long as growth remains pretty much stable, and the Fed doesn’t restart
tightening. In the first case, the labour market will need to keep on being
resilient, while in the second case, inflation should not start trending higher
so much that the Fed is forced to change course.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones broke
out of the rising wedge to the
downside recently. This opened the door for a bigger correction into the 38043
level, but the sellers failed to keep the momentum going and the buyers
eventually managed to invalidate the setup by pushing the price above the
bottom trendline. The bias
has turned bullish once again, so we can expect the buyers to pile in now and
target a new all-time high.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price managed to break above the downward trendline and the bottom
trendline of the wedge. Moreover, the moving averages
crossed back to the upside signalling a change in momentum. This is where we
can expect the buyers to step in with a defined risk below the downward
trendline to position for new highs. The sellers, on the other hand, will want
to see the price falling back below the trendlines to position for a drop into
the 38043 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the break above the trendline and the
retest. We now have a strong support zone
around the 38950 level where we can find the confluence with
the red 21 moving average, the 38.2% Fibonacci
retracement level and the previous swing level. This
is where the buyers will look to buy from to target new highs, while the
sellers will want to see a break to the downside to position for new lows.

Upcoming Events

Today we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. Tomorrow, we conclude the week with the University
of Michigan Consumer Sentiment survey.

This article was written by FL Contributors at www.forexlive.com.