Dow Jones Technical Analysis

Yesterday,
the Dow Jones ended the day negative as the relief rally reached some key
resistance levels. The first part of the week has been pretty empty on the data
front, and we hadn’t any Fedspeak due to the blackout period. This has led to a
relief rally which was exacerbated by weaker US PMIs as the
market interpreted them as good news for inflation, although there were some
worrying commentary on the labour market side. Beginning today, we will have
many top tier economic data ahead as the new month comes with new reports.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
pulled back into the key resistance level at
38464 where we can also find the confluence of the
38.2% Fibonacci retracement level
and the red 21 moving average. This is
where we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into the 37128 level. The buyers, on the
other hand, will want to see the price breaking higher to invalidate the
bearish setup and increase the bullish bets into a new all-time high.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more
clearly the bearish setup around the 38464 resistance and we can also notice
that the trend on this timeframe has already shifted to the upside. This might
be an early signal for a rally into a new all-time high, but the price will
need to break above the resistance to confirm it and trigger an even stronger
bullish wave.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a black counter-trendline that
is defining the current bullish momentum with the red 21 moving average acting
as dynamic support. The sellers will want to see the price breaking lower to
confirm a reversal and increase the bearish bets into new lows. The buyers, on
the other hand, will want to see the price breaking higher to start targeting
the all-time high.

Upcoming Events

Today we get the US Q1 GDP and the latest US Jobless
Claims figures. Tomorrow, we conclude the week with the US PCE report.

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