This week started like the last one with a broader rally in the markets as the risk sentiment got supported by another lack of a ground operation in Gaza over the weekend and the positive news about a couple of hostages being released. Yesterday, on the other hand, we got the complete reverse with the Dow Jones opening lower and selling off for no apparent reason except a reaction to some key resistance levels. The selloff accelerated in the evening as the Israeli PM Netanyahu said that they were preparing for a ground invasion. Will we see another selloff into the weekend?
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that after a brief bounce at the start of the week, the Dow Jones yesterday began to fall again. The sellers are eyeing the 32597 level at the moment as the risk sentiment remains negative. That’s where we can expect the buyers to step in with a defined risk below the level to position for a rally back into the trendline around the 34000 level.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that there’s not much to glean from this timeframe. The buyers might want to step in already at the equal lows but in the current context, there’s a high chance that the Dow Jones continues to fall into the weekend.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price yesterday rejected the resistance around the 33265 level where we had the confluence with the trendline and the 38.2% Fibonacci retracement level. The buyers will want to see the price breaking above the trendline to gain more confidence and pile in to target a rally into the 34000 resistance.
Upcoming Events
Today, we will see the US Jobless Claims data with the market likely focusing on the Continuing Claims figures as they’ve been recently showing some softness. The market may not like bad data given the fragile risk sentiment. Tomorrow, we will get the US PCE report, which is not expected to change anything for the Fed at this point in time.
