Our expectations indicate the possibility of the index's return to the downside scenario during its upcoming trading.
The Dow Jones Industrial Average rose slightly during its recent trading at the intraday levels, to achieve gains in its last sessions by 0.27%, to gain about 82.32 points. It settled at the end of trading at the level of 31,029.32, after falling sharply during Monday's trading by - 1.56%.
The energy and real estate sector led the losers, while the health care and consumer goods sectors were the top gainers.
In terms of economic data released yesterday, Wednesday, the US GDP for the first quarter was revised down in the third estimate to an annual contraction of 1.6% from a decline of 1.5% in the second estimate. Personal consumption expenditures were revised to show a growth pace of 1.8% from the previous estimate. an increase of 3.1%.
Speaking at an European Central Bank forum, Powell said monetary policy is a "blunt tool" and that the war in Ukraine presents challenges. He sees that the Fed can make a soft landing that would slow inflation and economic growth while keeping the labor market strong and not pushing the economy into recession. There's always a chance the Fed will raise interest rates a lot, but Powell said he doesn't see that as the most likely outcome.
Technically, the index with its recent rise is trying to compensate for some of its previous losses. This is at a time when positive signs are coming from the relative strength indicators, and following the stability of the main support level 31,000. The dominant trend remains the corrective bearish trend in the short term along a slope line, with the negative pressure continued for its trading below the simple moving average for the previous 50 days, as shown in the attached chart for a (daily) period.
Therefore, our expectations indicate the possibility of the index's return to the downside scenario during its upcoming trading, especially in the event of its stability returning below the 31,000 support level, to target the important support level 29,653.30 after that.