Dow Jones Technical Analysis: Easing Negative Pressure

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Our expectations point to a bigger ascent of the index in its next trade.

The Dow Jones Industrial Average surged, rising in its recent trades at intraday levels to post gains for the third consecutive session, of 0.86%. The index gained around 305.28 points and settled at the end of the session at the 35,768.07 level, after rising 1.06% in Tuesday’s trading.

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Markets remained jittery amid lingering inflation fears as high inflation led markets to expect the Federal Reserve to repeatedly hike interest rates and reduce the size of its balance sheet in 2022 This would pump less money into the bond market, lower bond prices and raise bond yields, which in turn creates headwinds for equities.

January’s CPI report is due out Thursday morning, with economists polled by The Wall Street Journal predicting a monthly rise of 0.4% and an annual increase of 7.2%, after a 40-year high of 7% . In the December reading.

Atlanta Fed President Rafael Bostic said in a TV interview that he expects the Fed to raise rates by three-quarters of a point in 2022, while “leaning” toward the possibility of an increase in the fourth quarter. He also said he would like to see the central bank significantly reduce the size of its balance sheet. Bostick is not this year’s voting member of the Federal Open Market Policy Committee.

Cleveland Fed Chair Loretta Meester, a voting member, said Wednesday she didn’t see a “compelling case” for a 50 basis point hike in March, but said if inflation doesn’t not moderate later this year, interest may need to be increased. rate at a faster rate.

Technically, the index managed its recent rise by shedding negative pressure from the previous 50-day simple moving average, amid the dominance of the main medium-term uptrend and its trade along a line. of slope, as shown in the attached table for a period (daily). We note the return of positive RSI indicators, despite reaching overbought zones.

Therefore, our expectations point to a bigger ascent of the index in its next trading sessionthroughout its stability above the support level 35,366.69, to target the main resistance level near it 36,000, with a view to attacking it.

Dow Jones Industrial Average

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