The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.18%, to lose about -58.13 points. It settled at the end of trading at the level of 32,774.42, after rising during trading at the beginning of the week on Monday by a rate of 0.09%.

Investors now see a 68.5% chance that the Fed will raise rates by 75 basis points at its next meeting in September, which would be the third big increase in a row.

Given the importance of the July CPI release which is due later Wednesday and will be watched closely by traders, economists anticipate that the decline in energy prices could help slow the pace of consumer price increases, which are at their highest levels in decades. YoY headline CPI rose 9.1% in June, the highest level in four decades. Economists polled by FactSet expect the core CPI to slow to 8.7%, but analysts warned that a hotter-than-expected reading on the headline or core number – which excludes volatile food and energy prices could rattle markets.

Analysts said a drop in the New York Fed’s gauge of consumer inflation expectations on Monday was a positive sign, but strong wage growth data in the July jobs report released on Friday and a sharp rise in unit labor costs in data released on Tuesday were a concern.

Dow Jones Technical Outlook

The index found some negative pressure after testing the ceiling of that bearish corrective price channel that limits its recent trading in the short term. It is shown in the attached chart for a period of time (daily), especially with the influx of negative signals on the relative strength indicators, after their arrival earlier. Overbought areas, all of this comes in light of the continuation of positive support for its trading above its simple moving average for the previous 50 days, which curbed the index’s recent losses.

Therefore, our expectations indicate a decline in the index during its upcoming trading, throughout the stability of the resistance 33,240, to target the support level 31,885.

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Our expectations indicate more decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses for the fifth consecutive day, by -0.50%, to lose the index towards -151.91 points. It settled at the end of trading at the level of 30,364.84, after its decline during Monday’s trading by – 2.79%.

As markets prepare for a more aggressive policy tightening from the Federal Reserve on Wednesday, some analysts still believe the FOMC will stand by the 50 basis point increase it has been hinting at in recent weeks, as yesterday’s sharp market sell-off marks investors who have finally acclimatized. With painful steps that will be required to bring down high inflation to its highest level in 40 years, markets believe that the US Federal Reserve will need more rate hikes to try to slow demand and control inflation.

A pair of sentiment indicators and the monthly producer price report served as the key US data points on Tuesday, with the producer price index rising 0.8% in May after rising 0.4% in April, with energy prices up 5% and food prices stable. The National Federation of Independent Business monthly sentiment index fell slightly to 93.1 in May from 93.2 in the previous two months. The Daily Business Investor Confidence Index, the first consumer gauge for June, fell to 38.1 from 41.2 in May, the lowest level since August 2011. A reading below 50 indicates more pessimism.

Technically, the index suffers from the continuation of negative pressure for its trading below the simple moving average for the previous 50 days. Negative signals are appearing in the RSI indicators, despite reaching oversold areas. All of this comes in light of the index’s trading along a corrective bearish slope line in the short term, as shown in the attached chart for a time period (daily).

Therefore, our expectations indicate more decline for the index during its upcoming trading, throughout its stability below the main resistance level 31,000, to target the support level 29,550.

Our expectations indicate more decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -1.05%, to lose the index about -348.58 points. It settled at the end of trading at the level of 32,899.70, after its rise in Thursday’s trading by 1.33%, During the past week, the index decreased by 0.9%.

Stocks came under pressure after the strongly positive non-farm payrolls report in the US, which saw around 390K jobs added in May. This was higher than the 325,000 that economists had expected, according to a Bloomberg survey.

The report fueled already aggressive rate hike bets by the Federal Reserve. Investors are now anticipating 50 basis point gains at the next two Federal Reserve meetings, and an 84% chance of a 50 basis point hike at its September meeting. Meanwhile, the US dollar halted its two-week losing streak, rising nearly half a percent over the course of the week. Stocks somewhat responded with those aggressive bets.

The unemployment rate remained unchanged at 3.6%, compared to the expected 3.5% rate. The labor force expanded by 330,000, and the labor force participation rate recovered slightly but remained below its pre-coronavirus level.

Technically, the recent index’s decline came as a result of the stability of the important resistance level 33,271.90. This is the resistance that we had referred to in our previous reports, in light of its trading within a descending corrective price channel that limits its previous trading in the short term, as shown in the attached chart for a period of time (daily). This is with the continuation of the negative pressure of its trading below the simple moving average for the previous 50 days. We notice the start of the influx of negative signals with the relative strength indicators, after they reached areas that are highly overbought. If it is compared to the movement of the index, it suggests that the divergence is starting to be negative, which doubles from negative pressures on its upcoming trading.

Therefore, our expectations indicate more decline for the index during its upcoming trading, as long as the resistance level 33,271.90 remains intact, to target the main support level 32,000.