The Dow Jones Industrial Average continued to decline during its recent trading at the intraday levels, to record losses for the fifth consecutive day, by -1.02%. It lost the index about -326.63 points and settled at the end of trading at the level of 31,834.12, which is the lowest new level for this year, after its decline on Tuesday, trading increased by -0.26%.
The index fell after US inflation data beat its estimates, higher price pressures may prompt the Federal Reserve to continue raising interest rates at its upcoming monetary policy meetings.
The Labor Department reported Wednesday that its consumer price index rose 8.3% year-on-year in April, above expectations of 8.1%, but down from the 8.5% increase in March. Higher prices for services such as an 18.6% increase in airfares month-on-month drove up inflation.
Core CPI, which excludes more volatile food and energy, rose 6.2% in April, down from 6.5% in March.
Technically, the index continues to decline amid the dominance of a bearish corrective wave in the short term, and was affected by the breach of a major bullish trend line earlier, as shown in the attached chart for a period of time (daily). In addition, the index suffers from continuing negative pressure due to its trading below the simple moving average for a period of the previous 50 days. We notice the influx of negative signals on the RSI indicators, despite reaching oversold areas, to break the 32,000 support level for the first time this year.
Therefore, we expect the index to continue declining during its upcoming trading, as long as it remains below the 32,000 level, to target the support level 30,547.50.
