The Dow Jones Index (US 30) has moved steadily higher over the last 10 trading days as traders continue to unwind short positioning attached to the popular sell US assets idea that seemed to dominate at the beginning of April, in the pre President Trump 90 day tariff pause era.
At the start of this new week, after a period of quiet trading on Monday, mainly due to the UK bank holiday, the focus for traders across the next 4 days may well be on whether President Trump and his negotiating team can report progress on trade deals with allies, as well as the Federal Reserve Interest Rate Decision (Wednesday 1900 BST) and Press conference, led by Chairman Powell (commencing 1930 BST).
Now, while no change to US interest rates is expected at this meeting, the update from policymakers regarding their current outlook for the economy, inflation and path of interest rates across the rest of the year, could well generate some market moving headlines that may impact whether the US 30 continues to post fresh highs, or gives up some of its recent gains.
Technical Update: Further Recovery Potential?
The recent sharp sell-off that saw the Dow Jones Index fall more than 19% eventually found support around 36873, which was a level that was equal to the 50% Fibonacci retracement of the October 2022 to December 2024 strength.
This type of decline back to such a retracement can sometimes see a reactive recovery materialise from the downside extremes in price, and as the weekly chart below shows, 36873 seems to have helped prompt the recent upside move.
Interestingly, the reactive recovery in the index has now seen closing breaks above 40783, a level that is equal to the 50% Fibonacci retracement of December 2024 to April 2025 price weakness, and traders may now be viewing this move as suggesting further possibilities for a more extended phase of price strength.
Assessing the Daily Chart
While the weekly chart levels are useful, it can also be helpful to assess the daily chart to try to gauge which levels, if broken, may suggest earlier clues for the next possible directional move in the Dow Jones Index, in the run up to, during and after the Federal Reserve Interest Rate Meeting and Press Conference.
Possible Resistance Levels:
With recent price strength breaking above resistance at 40783 (50% retracement of the latest decline) this may lead to a more sustained period of price strength.
As such, this may result in further attempts to push higher towards 41809, which is the 61.8% retracement, possibly even towards 42834, which is the March 26th session high.
Possible Support Levels:
The recent strong rally from the weekly support at 36873 (50% retracement of the October 2022 to December 2024 advance), possibly points to this as a long term support.
However, is there anything within the daily chart that may offer clues to shorter term support levels?
By calculating Fibonacci retracements of the April/May 2025 price strength, we can see the 38.2% level stands at 39991.
If closing breaks under this potential support were to occur, then risks might turn towards a more extended phase of price weakness towards 39570, the 50% retracement support level, even 39150, which is equal to the deeper 62% retracement.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
At the start of this new week, after a period of quiet trading on Monday, mainly due to the UK bank holiday, the focus for traders across the next 4 days may well be on whether President Trump and his negotiating team can report progress on trade deals with allies, as well as the Federal Reserve Interest Rate Decision (Wednesday 1900 BST) and Press conference, led by Chairman Powell (commencing 1930 BST).
Now, while no change to US interest rates is expected at this meeting, the update from policymakers regarding their current outlook for the economy, inflation and path of interest rates across the rest of the year, could well generate some market moving headlines that may impact whether the US 30 continues to post fresh highs, or gives up some of its recent gains.
Technical Update: Further Recovery Potential?
The recent sharp sell-off that saw the Dow Jones Index fall more than 19% eventually found support around 36873, which was a level that was equal to the 50% Fibonacci retracement of the October 2022 to December 2024 strength.
This type of decline back to such a retracement can sometimes see a reactive recovery materialise from the downside extremes in price, and as the weekly chart below shows, 36873 seems to have helped prompt the recent upside move.
Interestingly, the reactive recovery in the index has now seen closing breaks above 40783, a level that is equal to the 50% Fibonacci retracement of December 2024 to April 2025 price weakness, and traders may now be viewing this move as suggesting further possibilities for a more extended phase of price strength.
Assessing the Daily Chart
While the weekly chart levels are useful, it can also be helpful to assess the daily chart to try to gauge which levels, if broken, may suggest earlier clues for the next possible directional move in the Dow Jones Index, in the run up to, during and after the Federal Reserve Interest Rate Meeting and Press Conference.
Possible Resistance Levels:
With recent price strength breaking above resistance at 40783 (50% retracement of the latest decline) this may lead to a more sustained period of price strength.
As such, this may result in further attempts to push higher towards 41809, which is the 61.8% retracement, possibly even towards 42834, which is the March 26th session high.
Possible Support Levels:
The recent strong rally from the weekly support at 36873 (50% retracement of the October 2022 to December 2024 advance), possibly points to this as a long term support.
However, is there anything within the daily chart that may offer clues to shorter term support levels?
By calculating Fibonacci retracements of the April/May 2025 price strength, we can see the 38.2% level stands at 39991.
If closing breaks under this potential support were to occur, then risks might turn towards a more extended phase of price weakness towards 39570, the 50% retracement support level, even 39150, which is equal to the deeper 62% retracement.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
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Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.