In terms of technical analysis, the Dow Jones and the broader market had a lot to digest after the latest fed announcement. Fed has hiked by 25 bps as expected and signaled “ongoing increases” as they want to reach their terminal rate in the 5% area before pausing.

Everything that came out of this event was expected by the market, even a hawkish press conference. In fact, the market rallied even if the Fed Chair Powell signalled “a couple more hikes” coming at the next meetings. The market is now more focused on economic data rather than the Fed because we are at the end of their tightening cycle.

So, what’s next then? Looking ahead there are two big risk events on Friday: the NFP report and the ISM Services PMI. Since the resilience in the labour market is what is giving the market confidence in a “soft landing”, we can expect that a beat or as expected data should give the bulls confidence to reach higher highs.

A miss may be bad news though as it will be the first one in a long time and given that the risks of a “hard landing” are not yet out of the equation, the market may go into risk off. For the ISM Services PMI the same playbook should apply.

DOW JONES Technical Analysis

dow jones technical analysis

In the daily chart above, we can see that the market is basically ranging. Bulls and Bears have their reasons and both sides may be right as we are navigating really unique times.

You can feel the uncertainty on both sides. For now though, the bulls have the upper hand and the next target should be the resistance in the 35200 price area.

dow jones technical analysis

In the 4 hour chart above, we can see that there’s a clear support at 33500 and the price keeps on trading around it like a magnet. The near term resistance is at 34477, which is what the bulls need to break to maintain a bullish bias towards the 35200 resistance area. For now, the price action may just range.

dow jones technical analysis

Zooming in to the 1 hour chart, we can see the levels that should define the next moves. Stay above the 34477 level and the bulls will have control. Stay below the 33538 level and the bears will regain control.