Last week, the Dow Jones surged to new highs following the surprisingly dovish FOMC decision where the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell delivered some dovish comments. In the last part of the week, we got a slate of soft-landing data as the US Jobless Claims and Retail Sales beat expectations, while the US PMIs missed on the manufacturing side and beat on the services one.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones last week surged to a new all-time high following the dovish FOMC decision. The rally since the end of October has been pretty insane with very shallow pullbacks which points to either a short squeeze or lots of FOMO. Waiting for pullbacks didn’t provide any opportunity, but chasing such rallies is generally a bad idea as they can reverse most of the gains once a negative catalyst hits the market.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers would be better off leaning on the trendline where they will find the confluence with the previous all-time high level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking below the trendline to position for a drop into the 35683 level.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action and we can notice that the buyers will also find the confluence with the 38.2% Fibonacci retracement level around the trendline. This makes it a strong support zone where the buyers will lean onto to position for another rally while the sellers will want to see the price breaking lower to invalidate the bullish setup and target new lows.
Upcoming Events
This week is a bit empty on the data front as we head into the Christmas holidays. On Wednesday, we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims data, while on Friday we conclude the week with the US PCE report.