- The Dow Jones Industrial Average rose during its recent trading on the intraday levels, to achieve new gains in its last sessions by 0.30%.
- It added about 103.61 points to the index, settling at the end of trading away from the highest levels of the session at the level of 34,108.65, after advancing on Monday, as it increased by 1.58%.
The release of softer-than-expected consumer inflation data triggered a buying spree in stocks early in the session, building on gains made the day before, however, early enthusiasm faded as the day wore on as investors looked ahead to the Fed's key decision on Wednesday. .
The Consumer Price Index rose 0.1% in November from the previous month, a more modest rise than the 0.3% rise economists had expected. This was also down from a 0.4% rise in the previous month.
Compared to a year ago, CPI growth eased to 7.1% in November, after a 7.7% increase in the previous month, economists were looking for a 7.3% advance. While core prices excluding the more volatile food and energy sectors rose 6% from 6.3% in the previous month.
With softer CPI data the market is currently pricing in a 79% chance that the Fed will raise its key interest rate by 50bp, after the central bank raised rates by 75bp at each of the past four meetings.
Dow Jones Technical Analysis
Technically, the index is trying, in its recent trading, to breach the important and stubborn 34,281.36 resistance level, amid the index being affected by its earlier breach of a bearish corrective slope line in the short term, as shown in the attached chart for a (daily) period of time.
The index, with its recent rise, also supports the continuation of its trading above its moving average. In addition, we notice the beginning of a positive divergence formation in the relative strength indicators, after reaching oversold areas, in an exaggerated manner compared to the movement of the index, with the start of positive signals from them.
Therefore, our expectations indicate more rise for the index during its upcoming trading, especially if it breaches the 34,281.36 resistance, to then target directly the first resistance levels at 35,372.30.
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