Yesterday, the Dow Jones finished the day negative as some weak US data started to weigh a bit on sentiment. The ISM PMIs recently missed expectations with notably the employment indexes showing contraction. The ADP yesterday missed forecasts and the Job Openings were lower than expected with negative revisions to the prior figures. Moreover, we had Fed Chair Powell testifying to Congress, but he basically reaffirmed their patient approach stressing that the timing for rate cuts will be determined by the incoming data.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones broke out of the rising wedge to the downside. This has opened the door for a bigger correction into the 38033 level first and upon a further break lower, the 37128 level. The sellers will now pile in with more conviction to position for the drop into new lows. The buyers, on the other hand, will want to see the price reversing and rising back above the bottom trendline to invalidate the bearish setup and target new highs.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, given the break of the wedge, we could be in front of a reversal. We can see that the price retested the bottom trendline and continued lower as the sellers piled in with a defined risk above the trendline.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the break and retest of the trendline and the support turned resistance around the 38800 level. A break of the recent low should see the sellers increasing the bearish bets into the 38043 level. The buyers will likely wait around the 38043 level to position for another rally with a better risk to reward setup.
Upcoming Events
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US NFP report.
