Stocks pulled back modestly Tuesday, as investors awaited the outcome of a Federal Reserve policy meeting. A two-day Fed meeting will conclude with a policy statement this afternoon and a news conference by Chairman Jerome Powell. Investors are eager to see whether policy makers began to discuss the eventual tapering of bond purchases and the adjustment of expectations around rate increases in the wake of hotter-than-expected inflation readings. While NASDAQ and S&P 500 are trading close to records, Dow Jones lag the most. In this analysis we will focus on Dow Jones from a technical perspective.
Daily interval :
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Create account Try a demo Download mobile app Download mobile appMarket bears took over control and the US30 broke lower the Tenkan-line (red line). The Ichimoku cloud is now acting like a support and the Kijun-line can be found lower around 34.000 pts. Should buyers manage to hold declines here, an upward impulse may start to the Tenkan-line at 34.500 pts. On the other hand, should the index price break below the aforementioned 34.000 pts area, the deeper downward correction may start.
US30, D1 interval, Source : xStation5
H4 interval :
On a H4 time frame, sellers took the lead after drawing a double top pattern on the 34.760 pts area. Since then, the index price has been declining inside a flag pattern and broke below the Ichimoku cloud. The near-term support level to watch is 34.100 pts. If buyers manage to stop the decline before or on the aforementioned support, a new upward impulse may be possible to the upper limit of the flag pattern. Breaking above this upper limit may be a bullish signal. Otherwise, the downward correction may extend towards the next supports marked by red areas.
US30, H4 interval, Source : xStation5
H1 interval :
As we may notice, the bearish trendline is reinforced by the Ichimoku cloud. Breaking above the cloud may announce a new upward move and will lead to a Ichimoku bullish signal. Keep in mind that the Chikou-span (green line) should also break under the cloud to confirm the bullish signal.
US30, H1 interval, Source : xStation5
Réda Aboutika, XTB France
