The Dow Jones Industrial Average advanced during its recent trading on the intraday levels, breaking a series of losses that lasted for four consecutive sessions, achieving gains of 0.28%. It added about 92.20 points, to settle at the end of trading at the level of 32,849.75, after its decline during the trading day.
Stocks were pressured for most of the session by rising treasury yields after the Bank of Japan raised the ceiling for the 10-year Japanese government bond yield. This increased the momentum of the strong monetary tightening of major central banks, which gave the session a volatile character.
Many economists now expect the Bank of Japan to raise interest rates next year, joining the Federal Reserve, European Central Bank, and others after a decade of extraordinary stimulus.
New economic data showed that new home construction in the United States continued to decline in November and permits fell, in a sign that the Federal Reserve's tightening of its monetary policy is going in the direction the bank wants it to be.
The data showed that building permits collapsed by 11.2%, on a monthly basis in November. This is the largest monthly decline since the blow caused by the pandemic. On the other hand, the decline in the US dollar benefited the export expectations of energy producers and bullion miners, which revived stocks in those sectors.
Dow Jones Technical Analysis
Technically, the recent rise in the index comes as a result of its reliance on the support of its simple moving average for the previous 50-day period. It gave it some positive momentum that helped it to rise, especially with the start of a positive intersection with the relative strength indicators, after reaching oversold areas, in an exaggerated manner. Compared to the movement of the index, which indicates the start of a positive divergence in it, in light of its impact on the breach of a bearish corrective slope line earlier in the short term, as shown in the attached chart for a (daily) time period.
Therefore, our expectations indicate more rise for the index during its upcoming trading, provided that the 32,260.50 support level remains intact, to target once again the pivotal 34,281.36 resistance level, in preparation to attack it.
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