Dow Jones Forecast: 39000 Barrier on Hold, Rebound or Drop?

Dow Jones Forecast: the 39000 support is closely monitored for a potential breakout
Durable goods orders positively beat expectations, possibly favoring inflation levels
FOMC Member Waller Speech is next today after hawkish FOMC Minutes

The market sentiment is torn between rate cut hopes and hawkish Fed outlooks, weighing heavily on key indices. The latest durable and core durable goods orders positively surpassed expectations, FOMC minutes leaned towards a hawkish stand, and the Fed’s favored inflation metric is on the horizon next week to crucially to piece up the inflation and monetary policy state puzzle.

Further rate sentiment volatility is expected later today with the FOMC member Waller’s upcoming speech. With uncertainties all around, technical levels can potentially define prices in a simpler manner:

Dow Jones Forecast: 5H Time Frame – Logarithmic Scale

Yesterday’s drop was contained at a trendline parallel to that connecting the highs of April and May, reaching a low of 39052. From an Elliott wave perspective, a break below the 39000 barrier can potentially hold a strong support at the first wave high, near 38600. Conversely, if bullish sentiment sustains the 39000 level at the weekly close, a rebound can potentially be traced towards 39600 and 39900. This area represents the mid-channel zone and coincides with a 0.618 retracement of the drop from the 40000 high.

Dow Jones Forecast: iShares Dow ETF – 5H Time Frame – Logarithmic Scale

Yesterday's decline in the Dow's ETF saw a gap down towards the April highs, finding potential support at a mid-channel area and previously respected resistance. This parallel channel, though still forming, connects the trend highs and could determine the next levels for both the ETF and the index. Currently, the market lies in a state of uncertainty, with the relative strength index hovering around the neutral 50 level reflecting a balance between bullish hope and significant risk. Breakouts are awaited beyond the mid-channel area to likely guide the ETF's upcoming movements.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.