Yesterday the US CPI report missed expectations across the board with unrounded figures being even lower. This gave the market again soft-landing vibes and even if the market still sees the Fed hiking rates by another 25 bps at the July FOMC meeting, it’s likely that it will be the final one for this cycle. Now the focus should switch on growth, and as long as it holds, we should see the dips getting bought.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones is again breaking out of the 34477 resistance and now it should also be supported by a good fundamental catalyst, so we are likely to see a rally into the 35289 barring any ugly economic data that points to an imminent recession.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price bounced on the 33882 support level again and rallied into the 34477 resistance before extending the breakout as the US CPI missed expectations. We had a minor pullback from the previous high at 34710, but the Dow Jones should continue its rally into the next resistance.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a strong support zone here with the 34477 support, the black trendline and the 38.2% Fibonacci retracement level. The buyers should step in here with a defined risk below the trendline and target the 35289 resistance. The sellers, on the other hand, will want to see the price breaking below the trendline to confirm a fakeout and extend the fall into the 33448 support.
Upcoming Events
Today we have the US Jobless Claims on the agenda. We are likely to see a pullback in case the data misses expectations and a rally in case the data beats. Tomorrow, we wrap up the week with the University of Michigan Consumer Sentiment report.
