Dow Jones Falls as Market Awaits NFP report
The Dow Jones Industrial Average index declined over the last several days in what is considered a technical correction of the trend. The index fell below the key support level of 16926 and is currently finding support from the 200-day simple moving average, as well as from the 16668 support level, slightly above the ascending trend line. In addition, the 50-day simple moving average is ready to provide a significant resistance to the index around the 16926 level, in case of a rise.
For now though, the trend line could prove a solid level of support ahead of the US NFP report. If it doesn’t, it could be viewed as very bearish, prompting a move back towards the 16545 level. Furthermore, only a dip below the 16545 support would be a reason to assume bearish extensions towards the 16276. On the upside, 16926 now seems to provide immediate resistance for the index. However, major resistance on the upside continues to remain near its all-time high at 17356 region.
Both the RSI and the Stochastic lie near their oversold areas, indicating a continuation of the correction, while ADX is moving above 20 suggesting increasing momentum. In addition, the 50-day simple moving average lies above the 200-day simple moving average, keeping the outlook of the index positive at the moment, despite the recent loss of momentum (technical correction).
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