Dow Jones Technical Analysis

<p>Last week, we got comments from several Fed members
as the blackout period concluded following the FOMC meeting. The prevailing
sentiment remains the same as they are awaiting more economic data to determine
the extent of further rate increases. While the majority anticipates two
additional rate hikes this year, they consistently emphasize that these
decision hinge on the data. </p><p>Recent data trends may suggest an inclination
towards a rate hike. The <a href="https://www.forexlive.com/news/us-may-housing-starts-1631m-vs-1400m-expected-20230620/">housing market data</a>
surprised to the upside, <a href="https://www.forexlive.com/news/initial-jobless-claims-264k-versus-260k-estimate-20230622/">US Jobless Claims</a> remained
steady, and the <a href="https://www.forexlive.com/news/us-june-flash-sp-global-services-pmi-541-vs-540-expected-20230623/">US Services PMI</a> beat
forecasts. Naturally, the upcoming NFP and CPI reports will heavily influence
the situation. However, if we keep getting good data, it is likely that the Fed
will raise rates in July, aligning with the current market expectations.</p><p>Dow Jones Technical
Analysis – Daily Timeframe</p><p>On the daily chart, we can see that the failed
breakout of the 34477 resistance is
leading to a big pullback in the Dow Jones. The price has now fell into the red
21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> where we
may find some buyers leaning on it as they also have support from a previous
swing high level at 33892. </p><p>Dow Jones Technical
Analysis – 4 hour Timeframe</p><p>On the 4 hour chart, we can see that we have a
downtrend as the moving averages are crossed to the downside and the price
keeps printing lower lows and lower highs. The rally into the 34477 resistance
was <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. </p><p>In this case, we may expect the price to come all
the way back to the base of the divergence at 33448 where we can also find the
61.8% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level.
This will be a strong support zone for the buyers and a break lower would see
the sellers pile in more aggressively.</p><p>Dow Jones Technical
Analysis – 1 hour Timeframe</p><p>On the 1 hour chart, we can see that at
the moment the price is respecting the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> as the
sellers keep leaning on it on every pullback. The target for the sellers should
be the 33448 support with a break lower opening the door for a fall into the
32684 level. The buyers, on the other hand, may start to pile in if the price
breaks above the trendline and makes a new higher high, ultimately targeting a
breakout of the 34477 resistance.</p><p>The
<a href="https://www.forexlive.com/EconomicCalendar">data calendar</a> for
this week is even emptier compared to the previous one, featuring only the US
Jobless Claims and the US PCE reports towards the week's end. Despite this, we will
get further comments from many Fed members. However, since no significant
economic indicator has been released yet, it is unlikely that they will signal
the next course of action at this point.</p>

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