On the daily chart below for the Dow Jones, we can see that the sellers leant on the red long period moving average to position for another fall into the 32684 support as negative news on the debt ceiling front weighed on the Dow Jones. The debt ceiling has always been raised in the past and we have already seen this drama before with resolutions at the last minute.
Although, this time there might be a higher chance that the US defaults, the probabilities are still very low, and the market is still more confident on a resolution. Until then, we may have the classic “buy the rumour” type of trade where the Dow Jones rallies on every positive news and pulls back a little on negative ones.
Dow Jones Technical Analysis
On the 4 hour chart below, we can see that the price action has been quite messy lately which makes it harder to identify reliable support and resistance levels. Nonetheless, we can see that the Dow Jones is consolidating between a swing support level at 33000 and a swing resistance level at 33850.
The buyers seem to lean on the red long period moving average as dynamic support as we can notice from the recent bounces. Other than that, there’s not much to glean from this chart and the focus should be on the daily news flow as the debt ceiling talks go on with Biden set to speak with McCarthy today US time.
In the 1 hour chart below, we can see the recent knee jerk reaction lower as the debt ceiling talks were said to have stalled going into the weekend last week. The price broke through a recent resistance level that could have acted as support on a pullback, but the selloff was too strong, and the buyers couldn’t handle it.
If the Dow Jones manages to rally above that 33545 level again, then we should see the buyers jumping onboard. As of now, the next support is the swing level at 33280 where we should expect more buyers positioning for more upside. The sellers, on the other hand, will want to see the price breaking lower to target the 33000 support.
