Bottom line: Dow Jones long term structure continues to remain bearish against 29600 resistance. The indice has further carved a lower high around 29200 and is holding below that. Bears might remain poised to push through 26000 and 24500 in the near term.

 Fundamental Outlook:

Dow Jones had managed to gain in the past few sessions hitting 27730/50 highs before coming under pressure again. Optimism over another round of stimulus package might have induced the recent rally putting pressure on the US Dollar Index, which dropped below the 94.00 mark yesterday. It would be interesting to see if risk appetite continues to gain momentum.

Bitcoin has slipped to 10750 levels after hitting weekly high around 11000 mark. The crypto remains vulnerable to further drop as US Dollar might gain over the next few weeks. We might witness some strong bids coming in towards 7000-7500 range, going further.

AUDUSD has managed to take off immediate selling pressure after hitting 0.7000 handle over the last week. Since then, the risk associated currency pair has rallied through 0.7150 highs today, alongside global equity markets. The exchange rate might come under pressure again if risk aversion returns.

Technical Analysis:

Dow Jones had managed to produce a corrective rally through 27700/800 levels since the beginning of this week before hitting resistance again. The indices trades lower towards 27200/300 mark as we prepare to publish and bears might be poised to break below 26500 mark.

Dow Jones had dropped from 29600 through 18200 as an impulse wave in March 2020. Furthermore, a corrective wave was also carved between 18200 through 29200 respectively. Ideally, the structure should hold and bears might continue to remain in control from here.

Dow Jones might be facing resistance around 28400 mark and bears might be poised to keep prices below that. A push through 26500, would confirm that a meaningful lower high is in place around 29200 mark and the indice might accelerate lower towards 24500 in the near term.

Most traders might be preparing to hold short positions initiated from 29000/200 resistance zone and also looking to add further around 27300/400 mark with stop above 29600 and potential target below 25000 and beyond.

Prepared by

Harsh Japee, Technical Analyst.

Dow Jones Chart

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