The Dow Jones is approaching a key swing level, prompting speculation about its future direction. Last Friday, the Dow Jones finished the day largely unchanged following the release of two significant economic reports. The US NFP report initially led to a spike in market expectations, but subsequent analysis revealed that the data was not as positive as it initially seemed. The release of the ISM Services PMI further shocked the market, with data missing across the board and the employment sub-index plummeting to levels reminiscent of past recessions.
Despite the market’s optimism about potential rate cuts, these developments are signaling bearish trends, particularly as they coincide with stock market highs. Analysts are advising caution for bullish investors in the coming period.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, the Dow Jones closed the day unchanged, with attention focused on the support around the 37066 level, where the recent swing low and the 21 moving average converge. This level is expected to attract buyers with a defined risk below the support, positioning for new highs. A break below this support could indicate a larger drop towards the 36030 level.
Dow Jones Technical Analysis – 4 hour Timeframe
Examining the 4-hour chart, it is evident that the uptrend has been supported by a trendline, which the price recently broke below, signaling a potential correction. Additionally, the latest upward movement diverged with the MACD, indicating weakening momentum often followed by pullbacks or reversals. A break below the 37066 level would confirm a reversal, with the 36030 level becoming the next target.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1-hour chart, the price is seen struggling at a minor downward trendline, with sellers possibly positioning for a drop towards the 37066 support, making a break lower the ultimate target. Buyers will need the price to surpass the trendline and the most recent lower high around the 37620 level to regain control and position for new highs.
Upcoming Events
This week’s data calendar is relatively sparse, with the US CPI report and US Jobless Claims figures being the only notable releases scheduled for Thursday.
Tags: Dow Jones Technical Analysis
