(MENAFN- DailyFX) Talking Points:
- A bit of pressure has started to show in US stocks after this week's outlay of risk events. FOMC and ECB helped to push matters, but .
- The Fed was fairly clear in their hawkish drive at this week's FOMC meeting, and rising rate cycles have a tendency to provide pressure to built-in bullish equity trends. Will a persistently hawkish Fed, combined with some additional risk items be enough to elicit a deeper reversal in the Dow?
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Dow Jones Reverses from Fibonacci Resistance
On Tuesday, . The price of 25,370 is the 14.4% retracement of the post-Election move, and this is the same level that helped to mark the March swing high in the pair. As we wrote, there was little on the bullish side and the one item of excitement was a potential bearish reversal off of this level as we moved towards the FOMC/ECB outlays that were on the calendar for the next couple of days.
That reversal has played out as resistance held, and prices are now back below the vaulted of 25,000 that had .
Dow Jones Daily Chart: Reversal From 14.4% Fibonacci Resistance Chart prepared by
This reversal has thus far amounted to a 23.6% of the bullish move that started in early-April, and it looks as though this support may not hold for long. That exposes deeper potential areas of support around 24,750 and 24,624, which is the 38.2% retracement of the same post-election move in the Dow Jones .
Dow Jones Four-Hour Chart: A 23.6% Retracement of the April-June Move Chart prepared by
On the bullish side of the Dow, the area of interest appears to be around the prior swing-low from late-May, and this takes place around 24,384 which is the 50% retracement of that April-June move. Just a bit higher at 24,522 we have the 23.6% retracement of the post-Election move, and collectively, these prices form an area that can be attractive for higher-low support in the early portion of next week should buyers actually begin to show at that area.
Dow Jones Daily Chart: Deeper Support Potential 24,384-24,522 Chart prepared by
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? Our have a section for each major currency, and we also offer a plethora of resources on -pairs such as , , , . Traders can also stay up with near-term positioning via our .
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--- Written by James Stanley, Strategist for DailyFX.com
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