Dow Jones Technical Analysis: Index Rises in Volatile Session – DailyForex.com

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The performance of the index in its last session was characterized by volatility, supported by economic data that indicated that inflation is declining. 

The Dow Jones Industrial Average advanced during its recent trading at the intraday levels, to achieve gains in its last sessions, by 0.17%. It gained about 56.22 points, and settled at the end of trading at the level of 33,592.93, after its decline during Monday’s trading by -0.63%.

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The performance of the index in its last session was characterized by volatility, supported by economic data that indicated that inflation is declining. This raise hopes that the US Federal Reserve will reverse its aggressiveness in raising interest rates.

While the Associated Press reported earlier in the session that Russian missiles crossed into Poland and killed two people. This escalated geopolitical tension as Poland is a NATO member, capping stock gains.

The Labor Department said that the US Producer Price Index rose 8% in the 12 months to October, down from September’s revised 8.4% increase. Last week, stocks jumped after the October CPI rose more slowly than expected.

Tuesday’s Producer Price Index report helped support the notion that inflation has peaked. While in other news, the first face-to-face meeting between President Joe Biden and President Xi Jinping helped support listed stocks in China and Hong Kong, as some tensions between the world’s two largest economies were seen to ease.

Meanwhile, Philadelphia Federal Reserve President Patrick Harker said on Tuesday he favored a 50 basis point rate hike over the Fed’s benchmark rate in December, while Atlanta Fed President Rafael Bostik said it would be needed to further raise interest rates, even with a “glimmer of hope” on inflation.

In other US economic data, the New York Empire State Manufacturing Index for November showed that a measure of manufacturing activity in the state rose 13.6 points to 4.5 this month.

The Dow has outperformed the rest of the three major indices on Wall Street, which could be a sign of a bull run in the stock market, say some analysts.

Dow Jones Technical Analysis

Technically, the index’s rise comes amid being affected by the breach of a bearish corrective slope earlier in the short term. This is shown in the attached chart for a period of time (daily), with the positive support continuing for its trading above its simple moving average for the previous 50 days.

We also notice that positive signs appeared on the relative strength indicators after the indicator succeeded in discharging its overbought saturation, which was evident in it in the past.

Therefore, our expectations indicate more rise for the index during its upcoming trading, as long as support remains at 32,504.00, to target the important and close 34,281.30  resistance level in preparation for attacking it.

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