Last week, the Dow Jones managed to print another all-time high given another slate of goldilocks economic data with a pickup in the PMIs, a much better than expected GDP report and the Core PCE indicating that the inflation rate over the last 3 and 6 months data fell below the Fed’s 2% target. This week contains many risk events so we might see the market trading a bit on the defensive side, but barring any negative surprises, we will likely continue to see new higher highs.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones eventually pulled back into the previous highs around the 37777 level where it bounced from as the buyers piled in with a defined risk below the support to position for a rally into a new all-time high. There’s not much to do here for the sellers other than waiting for a break below the support to target the 37066 level next.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had also the 38.2% Fibonacci retracement level adding extra confluence to the support zone. The bias should remain bullish as long as the price stays above the 37777 level.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that price is now at another support zone around the 38050 level. Dip-buyers are likely to step in here to increase the bullish bets into new highs. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the 37777 support.
Upcoming Events
This week is going to be a really busy one with the FOMC rate decision and lots of economic data on the agenda. We begin tomorrow with the US Job Openings and the US Consumer Confidence reports. On Wednesday we will see the US Employment Cost Index and the ADP data before the FOMC rate decision later in the day. On Thursday, we get the latest US Jobless Claims figures and the ISM Manufacturing PMI. Finally, on Friday, we conclude the week with the US NFP report.