News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/MGy9OTXpUI
  • The Australian Dollar still remains vulnerable as it extends losses against its major counterparts. What is the road ahead for AUD/USD, AUD/JPY, AUD/NZD and AUD/CAD? Get your AUD technical forecast from @ddubrovskyFX here: https://t.co/ph20zFv4qS https://t.co/v4g9ATf4rr
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/De69mTseZN
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/D7AeTM5OpH
  • EUR/USD tumbled last week on the day of the ECB’s latest policy announcement, and that weakness is set to continue this week as a flood of major Eurozone economic statistics is released. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/9B4rJnzWuz https://t.co/ENF3xlkuyP
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/Gps2Xp32h9
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/hftCEho1lM
  • Gold price action is primed for volatility next week with the Fed decision on deck. How real yields and the US Dollar react to fresh guidance from Fed officials will be key for gold outlook. Get your weekly gold forecast from @RichDvorakFX here: https://t.co/MzaIl7tPmZ
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/rFlQtyQS81
  • Canadian Dollar snapped a three-week losing streak after USD/CAD stalled at key technical resistance. Get your CAD weekly forecast from @MBForex here: https://t.co/BPHuKecwnz https://t.co/73OmuCKfU9
Dow Jones Industrial Average in a Tight Range Post Fed Minutes

Dow Jones Industrial Average in a Tight Range Post Fed Minutes

Jeremy Wagner, CEWA-M, Head of Education

Talking Points

-Dow Jones Industrial Average (DJIA) trades sideways and finishes near Wednesday’s close, which was post Fed minutes

-DJIA current corrective pattern has eaten up enough time for a tradeable low to form

-Follow Dow Jones Sentiment to confirm moves into support zone or a trend line break

After a soft close on Wednesday (the day Fed minutes were released), Dow Jones has traded sideways despite the hawkish tone by the Fed. DJIA has traded in a tight range since and finished the week at 17,500. This appears to be a continuation of the market’s calm response to the Fed’s hawkish tone. Though Fed Funds futures are pricing in a greater probability of a rate hike over the summer when compared to a week ago, the corresponding probabilities are still less than 50%.

Therefore, the markets still haven’t fully bought into a rate hike within the next 9 weeks which is capping any significant sell off for the moment. On this Friday May 27, Fed Chairwoman Janet Yellen holds up the podium as many ears will be listening for a change of tone or some indication that a June or July hike could become more prevalent.

We began talking on May 6 about a correction lower in US30, a CFD which tracks the DJIA, whereby this correction is likely to chew up time more so than price. The technical structure of price action since the April 20 high is corrective with overlapping 3 wave moves lower.

Dow Jones Industrial Average in a Tight Range Post Fed Minutes

The good news about such a structure is that its resolution points to higher prices which is consistent with the market’s current disbelief of a summer rate hike. We are now about 5 weeks into the correction that began on April 20 so it’s possible a trading bottom forms over the next few weeks.

We have discussed in the past how the technical picture appears to paint a drift lower of prices into support zone 2 which is near 16,900-17,144. We will look for prices to grind lower and see how prices react in this support zone.

For the time being, patience is the key while we look for a buy signal in the above cited support zone. If prices break above the purple resistance line, then we’ll reconsider the probability of the tradeable low being in place. A bullish trader may consider a long position on a break of the purple trend line as that would indicate a shorter term change in the mood of the market.

Dow Jones Industrial Average in a Tight Range Post Fed Minutes

Regarding sentiment, the Speculative Sentiment Index shows the number of short positions and long positions have been dissipating over the past week. For a sideways correction in price, the reduced interest in trading shows traders are getting shaken out of their positions which is what a correction intends to do. If we begin to see short traders re-enter the picture, especially if price is in the support zone 2 or upon breaking the purple trend line on the price chart, then it could be indicative the tradeable low is at hand.

Learn more about Speculative Sentiment Index with this 5 minute video.

The above is a shorter term forecast for Dow Jones. If you are interested in our Q2 2016 equities forecast, download it here.

Suggested Reading:

CAC 40 Fails to Make a Significant Change in Price

S&P500: Chop Continues, Short-Term Chart in Focus

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

Check out the latest standings for the FXCM trading contest HERE.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES