Last week the Fed kept interest rates unchanged as expected while striking a hawkish tone via the Dot Plot. In fact, the Fed not only sees another rate hike by the end of the year, but also much less rate cuts by the end of 2024. Fed Chair Powell has also admitted that the soft-landing scenario is not his base case at the moment and stronger than expected economic data may require additional tightening. For now, the economic data remains strong with Jobless Claims crushing expectations last week, which is not what the Fed wants to see.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones eventually broke out of the key trendline following the FOMC meeting and it’s now eyeing the 33622 support. The sellers remain in control as the price keeps printing lower lows and lower highs and the moving averages are crossed to the downside. The price is a bit overstretched though as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next impulse.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price closed below the previous low on Friday which keeps the bearish bias intact, but the sellers might want to wait for a pullback before positioning again for further downside. If we do get a bounce around this level, we should see the price finding resistance around the 34300 level.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bearish setup with the support turned resistance around the 34300 level where we have the confluence with the Fibonacci retracement levels and the red 21 moving average. This is where we can expect the sellers to pile in with a defined risk above the resistance and target the 33622 support.
Upcoming Events
This week is pretty bare on the data front with just a couple of notable economic releases. Tomorrow, we will get the latest US Consumer Confidence report while on Thursday we will see again the US Jobless Claims data. On Friday, we conclude the week with the US PCE data.
