On the daily chart below, we can see that after getting close to the key 34477 resistance, the market sold off and the moving averages crossed to the downside. The sellers keep leaning on the red long period moving average to position for further downside, but the buyers keep fighting back strongly. Recently, the market fell as the US CPI report showed still too high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term rates and the disinflationary trend slowing, especially for the Core data.

The University of Michigan report last Friday missed expectations and the long-term inflation expectations surprised with a big jump. Fed Chair Powell once mentioned that they look at those expectations, so the market reacted on that. Although the data recently suggests that the Fed may need to raise rates in June again, it’s more likely that they will wait for another NFP and CPI report before moving on with another hike.

Dow Jones Technical Analysis

On the 4 hour chart below, we can see that the price action is choppy at the moment, with no clear direction or support and resistance level. We can just trust the structure with the swing low at 33182 as support and swing high at 33845 as resistance. The sellers are likely to lean on the red long period moving average and target a break of the low, while the buyers will want the price to break above the moving average to extend the rally towards the high and beyond. This week is bare on the data front with just the retail sales report tomorrow and Fed Chair Powell speech on Friday.

In the 1 hour chart below, we can see the last Friday’s selloff and the bounce from the 33182 low. The buyers are eyeing the swing high at the 33540 level and a break above that level should lead to an extension towards the 33845 level. The 33540 level is likely to be the last line of defence in the near term for the sellers.