On the daily chart below, we can see that the price has bounced from the 33000 level and rallied towards the red long period moving average. This is where the sellers are likely to lean on looking for more downside and targeting the 32684 support. The price action overall remains messy as the market remains uncertain on the future path of the economy and interest rates.
Recent economic data has been beating expectations and prompted the Fed officials to acknowledge that in case the data keeps on improving, they might raise interest rates again at the June meeting. This week, we also got positive news on the debt ceiling front which boosted the market and triggered a rally.
Dow Jones Technical Analysis
On the 4 hour chart below, we can see that due to the choppy nature of the recent price action, there’s not much to glean from the chart. We have some interesting levels though where the price reacted the most. On the upside, the 33850 resistance keeps the bearish bias intact as it’s the last lower high of the recent downtrend. The buyers are likely targeting that level at the moment, and if they manage to breakout, we should see 34477 next.
On the downside, we have the 33000 support that stalled the recent fall. In between, we have the 33545 level that is likely to act as a barometer for the sentiment where the bias turns bearish if the price falls below it and bullish if the price stays above it.
In the 1 hour chart below, we can see that the recent breakout of the 33545 level is diverging with the MACD. This is generally a sign of weakening momentum and it’s often followed by pullbacks or reversals. In this case, we may see a pullback to the broken 33545 level where we can also find the 38.2% Fibonacci retracement level and the red long period moving average for confluence.
The buyers are likely to lean on that level with a defined risk just below it, while the sellers will want to see the price to break below it to pile in and target the 33000 support. The big event to watch today is Fed Chair Powell speech. He’s expected to reiterate his comments at the last FOMC press conference but watch out for more hawkish or dovish comments as those can trigger big moves.
