Technical Analysis

DJIA: Dow Softens From 2019 Highs as 26okay Re-Take a look at Continues

Dow Jones Speaking Factors:

– The 2019 US fairness rally has continued into this week, because the Dow Jones Industrial Common set a recent three-month-high on Monday. Since then, costs have been pulling again however assist has continued to carry with the index at present re-testing the 26okay psychological degree.

– At this level, short-term methods will possible be specializing in bullish continuation themes, searching for 2019 power to proceed. On a longer-term or swing-basis, the potential for reversal is constructing as famous by a rising wedge formation constructing close to November/December swing-highs.

– DailyFX Forecasts on quite a lot of currencies such because the US Greenback or the Euro can be found from the DailyFX Buying and selling Guides web page. In the event you’re seeking to enhance your buying and selling method, try Traits of Profitable Merchants. And should you’re searching for an introductory primer to Forex, try our New to FX Information.

Do you need to see how retail merchants are at present buying and selling the US Greenback? Take a look at our IG Consumer Sentiment Indicator.

The 2019 US fairness rally has continued into this week because the Dow Jones Industrial Common set a recent three-month-high on Monday. The index is now re-testing the 26,000 psychological degree as costs have pulled again within the face of a heavy financial calendar. The previous two days have seen FOMC Chair Jerome Powell testify on Capitol Hill as a part of the Fed’s twice-annual testimony in-front of Congress; and whereas Chair Powell prevented any direct alerts of future fee hikes or tighter coverage choices on the Fed, US shares stay on their heels after a really robust eight-week run.

Dow Jones 4-Hour Value Chart: Take a look at of 2019 Assist Pattern-Line

DJIA four hour price chart

Chart ready by James Stanley

Dow Jones Brief-Time period

The large query on a short-term foundation within the index is for a way lengthy the bullish theme would possibly run. Costs have stayed on a constant trajectory all through 2019 with patrons regularly providing higher-low assist, and that’s been in stark distinction to the bearish themes of This autumn. As proven above, worth motion is within the means of testing the bullish trend-line that’s held the lows for the majority of this 12 months.

For these taking a look at bullish continuation approaches, assist potential exists on the Fibonacci degree at 25,816, as that is the 78.6% retracement of that This autumn sell-off. A bit decrease brings the 14.four% marker of the post-Election run within the Dow, taking the low from November 2016 as much as final 12 months’s excessive. That degree rests at 25,595 and this is identical worth that had held the highs within the Dow in mid-February. And beneath that’s one other attainable degree of curiosity round 25,266, as that is the 14.four% retracement of the 2015-2018 main transfer, and that is the worth that had helped to set the low within the index in the midst of this month. A break-below that assist brings to query the viability of continuation themes of the bullish development.

Dow Jones Two-Hour Value Chart

Dow Jones two hour price chart

Chart ready by James Stanley

Dow Jones: Reversal Potential

As proven within the first chart on this article, the Dow is at present constructing right into a rising wedge sample. Any such formation will typically be approached with the intention of bearish reversals; largely searching for the dearth of enthusiasm from patrons at highs to finally take-over, opening the door for bears to take-control. However, given the motivation that’s been pushing stocks-higher to this point this 12 months, that may be a tough case to make. So, for these taking a look at bigger-picture reversals in US shares, following a continued draw back break from this formation, may start to open the door for such a state of affairs. A draw back break by the two-week-low round 25,764 might be an early sign of impending reversal potential.

Dow Jones Eight-Hour Value Chart

DJIA Dow Jones Eight Hour Price Chart

Chart ready by James Stanley

You might also be all for:

Day Buying and selling the Dow Jones: Methods, Suggestions & Buying and selling Alerts

To learn extra:

Are you searching for longer-term evaluation on the U.S. Greenback? Our DailyFX Forecasts for Qfour have a piece for every main foreign money, and we additionally provide a plethora of sources on USD-pairs equivalent to EUR/USD, GBP/USD, USD/JPY, AUD/USD. Merchants may also keep up with near-term positioning through our IG Consumer Sentiment Indicator.

Foreign exchange Buying and selling Assets

DailyFX affords a plethora of instruments, indicators and sources to assist merchants. For these searching for buying and selling concepts, our IG Consumer Sentiment reveals the positioning of retail merchants with precise reside trades and positions. Our buying and selling guides carry our DailyFX Quarterly Forecasts and our High Buying and selling Alternatives; and our real-time information feed has intra-day interactions from the DailyFX crew. And should you’re searching for real-time evaluation, our DailyFX Webinars provide quite a few periods every week in which you’ll see how and why we’re taking a look at what we’re taking a look at.

In the event you’re searching for academic info, our New to FX information is there to assist new(er) merchants whereas our Traits of Profitable Merchants analysis is constructed to assist sharpen the ability set by specializing in danger and commerce administration.

— Written by James Stanley, Strategist for DailyFX.com

Contact and observe James on Twitter: @JStanleyFX


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