Dow Jones Technical Analysis

Last week, the Dow Jones got under pressure amid
geopolitical fears and a general risk off sentiment. The latest developments
saw Israel retaliating against Iran but the latter downplaying the airstrikes.
This episode might be behind our backs, although it’s worth to keep an eye on
it if it were to become a concern again. On the macro side, the Fedspeak turned
more hawkish, especially in the latter part of the week as the inflation
progress looks to be stalled. Overall, the last week had plenty of bearish
catalysts weighing on the market, so we will probably need some positive data
on the inflation front this week to turn the sentiment around.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones has
been trading inside a rising channel and continued to diverge with the
MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. Recently, we got a breakout which opened the door for a
bigger correction into the 37128 level. The sellers managed to break the second
key support level
and will now target a drop into the third and last one at 37128. The buyers, on
the other hand, will need to break the current downward trend to start
targeting new highs.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4
hour chart, we
can see that the price got stuck in a consolidation just beneath the second key
level. We also got a break above the downward trendline which
might be an early signal for a bigger pullback. The buyers will need the price
to break above the 38043 level to increase the chances for a bullish move and
position for a rally into the 38464 resistance. The sellers, on the other hand,
will likely step in around the 38043 level with a defined risk above it to
position for a drop into the 37128 support.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
clearly the resistance zone around the 38043 level with several rejections from
it. The moving averages on
this timeframe have crossed to the upside and we have a divergence with the
MACD, which could be another early signal for a bullish move into the 38464
resistance. If the price were to break higher and reach the 38464 zone, we can
expect the sellers to pile in more aggressively there as they will have an even
better risk to reward setup to target a drop into the 37128 support. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into a new all-time high.

Upcoming Events

This week is a bit empty on the data front with just a
few notable releases. We begin tomorrow with the US PMIs. On Thursday, we get
the US Q1 GDP and the latest US Jobless Claims figures. On Friday, we conclude
the week with the US PCE report.

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