Dow Jones Technical Analysis: The Index is Preparing to Attack a Stubborn Resistance – 13 February 2023

Investors digested the latest economic data and comments from Fed speakers after hawkish rhetoric from Fed officials dampened hope of a pause in rate hikes.

In terms of economic data, the preliminary report of the University of Michigan showed that the US consumer confidence index rose in early February to reach its highest level in 13 months at 66.4. This indicates that Americans are cautiously optimistic about the US economy. Relatively good situation.

The University of Michigan report also showed that the one-year inflation forecast rose to 4.2%, as the Federal Reserve tries to curb inflation by successively raising interest rates.

Recent inflation data suggests that price pressures have eased, but the US labor market remains strong as evidenced by last week’s Non-Farm Payrolls, which is a concern for monetary policymakers.

Technically, the index received some positive support after it was based on the support of its simple moving average for the previous 50-day period. It coincided with its reliance on the support of a minor and bullish corrective slope line in the short term, as shown in the attached chart for a period (daily).

The index’s rise came despite From the continuation of negative signals on the relative strength indicators, to prepare again to attack the pivotal and stubborn 34,281.36 resistance level.

Therefore, our expectations indicate that the index will rise during its upcoming trading, but on the condition that it must first overcome the aforementioned resistance hurdle at 34,281.36. The index would get rid of its negative pressures, to then target directly the first resistance levels at 35,361.36.