- The Dow Jones Industrial Average continued to decline during its recent trading on intraday levels, to record losses for the third consecutive day in trading on Friday, by -0.85%, or the equivalent of -281.76 points.
- It settled at the end of trading at the level of 32,920.47, after declining by Thursday in trading by It reached -2.25%.
- During the past week, the index declined for the second week in a row, by -1.70%.
The Federal Reserve pressured stocks after on Wednesday it raised interest rates by 50 basis points as widely expected, but at the same time signaled that the benchmark interest rate could remain above 5% until 2024.
Underlining this, John Williams of the Federal Reserve Bank of New York said on Friday that interest rates need to rise to control prices (inflation), saying that pricing pressures remain "stubbornly high" and that he expects rates to hold above 5% next year.
Outside the US the European Central Bank was among the central banks that raised interest rates this week. In economic data released on Friday, the US services sector "flash" index by Standard & Poor's Global showed that business conditions eased again in December.
Dow Jones Technical Analysis
Technically, the index continued its decline in its recent trading amid its continuous attempts to search for an upward bottom from which to base it that might help it gain positive momentum that might help it recover and rise again. This happened amidst the presence of negative signals in the relative strength indicators, despite its stability in highly saturated areas with selling operations, to reach its last decline. Based on the support of its simple moving average for the previous 50-day period, in conjunction with its re-testing of the bearish corrective slope line that the index had breached earlier, as shown in the attached chart for a (daily) time period.
Therefore, we still expect the index to rise again during its upcoming trading, provided that the 32,260.60 support level remains stable, to target the important 34,281.36 resistance level.
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