- The Dow Jones Industrial Average continued to decline during its recent trading on intraday levels, to record new losses in its last sessions by -1.03%.
- It lost about -350.76 points, to settle at the end of trading at the level of 33,596.35.
- This happened after declining during Monday's trading by a percentage of -1.40%.
The index fell for the second day in a row, as growing recession fears prompted investors to flee in search of safety. This put pressure on all three major US stock indices leading to their second drop of more than 1%.
Investors are preparing for a double whammy next week, with consumer price data (CPI) due on Tuesday and the conclusion of the Fed's two-day monetary policy meeting on Wednesday.
Financial markets generally agree that the Fed will announce a 50 basis point increase in the federal funds' target rate, this probability is currently 77%. Rates are expected to peak at 4.98% in May of 2023, up from 4.92% estimated on Monday before the service sector data.
But the question now remains how high will rates go and for how long, so every nuance of the FOMC statement and the next question-and-answer session of Fed Chairman Jerome Powell will be analyzed to try to answer those questions.
Dow Jones Technical Analysis
Technically, the index is trying, with its recent decline, to gain some positive momentum that may lead it to the return of its recovery, and also with the aim of helping it attack the stubborn 34,281.36 resistance level. This was considering the index being affected by its breach of a bearish corrective slope line earlier in the short term, supported by its continuous trading above the average.
The simple moving average for the previous 50-day period, as we notice in the midst of that a positive intersection with the relative strength indicators, after reaching highly oversold areas. This was exaggerated compared to the movement of the index, which suggests the start of a positive divergence in it, which may add more positive support to the index.
Therefore, our expectations are still suggesting that the index will rise again during its upcoming trading, as long as the 33,248.60 support remains stable, to target once again the 34,281.36, resistance level in preparation to attack it.
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