Market Optimism Rises with Cooler U.S. Inflation DataMarket Optimism Rises with Cooler U.S. Inflation Data
Probe Gold Commences Drilling Program on its Croinor Gold Property, Val-d’Or, QuebecProbe Gold Commences Drilling Program on its Croinor Gold Property, Val-d'Or, Quebec

The Dow Jones last week jumped following the miss
in the US CPI report
and went into consolidation ever since. The market doesn’t expect the Fed to
hike anymore and it’s pricing in the
first rate cut in May 2024.

At the moment, it looks like the market is still
trading based on inflation and interest rate expectations, but the softening in
the labour market as seen with the last NFP and Jobless Claims last
week, is gathering pace and it’s something to keep a close eye on.

Dow Jones Technical
Analysis – Daily Timeframe

Dow Jones Daily

On the daily chart, we can see that the Dow Jones is
consolidating at a key resistance level at
35000 following the incredible rally triggered by the miss in the US CPI
report. The rally was indeed overstretched as depicted by the distance from the
blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

Dow Jones Technical
Analysis – 4 hour Timeframe

Dow Jones 4 hour

On the 4
hour chart, we can see that the price is now near the upward trendline. This is
where we can expect the buyers to step in with a defined risk below the
trendline to position for a break above the 35000 resistance. The sellers, on
the other hand, will want to see the price breaking lower to pile in and
position for a drop back into the 34000 support.

Dow Jones Technical
Analysis – 1 hour Timeframe

Dow Jones 1 hour

On the 1 hour chart, we can see that the
price is diverging with
the MACD right
at the key resistance level. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it might be a
confirmation for the sellers that might indeed see a deeper pullback into the
34000 support. Watch out for what happens around these key levels.

Upcoming Events

This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we
have the FOMC Meeting Minutes but it’s unlikely to be market moving given that
it’s three-weeks old data. On Wednesday, we have the US Jobless Claims report
which is probably going to be the most important release of the week. Finally,
on Friday, we conclude the week with the latest US PMIs.

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