Dow Jones Technical Analysis

Yesterday, the Fed left interest rates unchanged as
expected with basically no change to the statement. The market was fearing some
hawkish stuff, but we didn’t get any. In fact, the Dot Plot showed still three
rate cuts for this year and the economic projections were all upgraded with
growth and inflation higher and the unemployment rate lower. Moreover, during
the press conference, Fed Chair Powell didn’t
sound hawkish, on the contrary, he was fairly neutral. This gave the Dow Jones
the green light for a rally as the risk sentiment turned very bullish.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones surged
to a new all-time high following the Fed decision. This is a buyers’ market, so
the sellers should refrain from taking new positions until we get a change in
the risk sentiment and some key breakouts on the lower timeframes. We can also
notice that the price continues to diverge with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it should be telling that the buyers should buy the
higher lows instead of FOMOing at higher highs.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price broke through the 39119 resistance and
triggered a strong bullish reaction as the buyers piled in aggressively for a
new all-time high. From a risk management perspective, the buyers will have a
much better risk to reward setup around the resistance now
turned support where there’s also the 38.2% Fibonacci
retracement level for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 38464 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
also have a minor trendline around the support zone where the buyers will
likely lean onto to position for new highs with a better risk to reward setup.
The sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 39464 level.

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