It all started midway through May when the Dow Jones 30 Futures (CME: YM) was knocked down by bearish sentiment, which took the index down 3.64% in a selling spree. The Dow Jones 30 now finds itself back where the bearish sentiment originated. Will bears stand their ground?  

The week ahead is dry on the U.S. economic calendar, with the only major event remaining, the U.S. labour market reports. The S&P Global Composite Index fell short of expectations, landing on 54.3 and weighed down by a weaker services PMI reading in the last month. Traders are pricing in a 67.8% chance of the Federal Reserve pausing on rate hikes in the upcoming meeting, which could support the index as borrowing costs near a peak.  

Technische Analyse 

The Dow Jones 30 Futures was taken over by bullish traders in the past week, undoing a downtrend that had manifested through a descending channel pattern and price trading below the 100-day moving average. A bullish surge led to the price breaking out of and above the descending channel pattern and moving average, with bulls in contention to redirect the index. Support and resistance were established at the 32633 and 33865 levels, respectively.  

After retracing 100% to the resistance level, the index was met with short-term selling pressure, which lowered it towards the 100-day moving average, where the price found a dynamic support. If the rejection of the moving average holds, price action could find upside momentum taking it back to the 33865 level to retest resistance.  

In contrast, a reversal could occur if supply outweighs demand at resistance, similar to the past. If downside momentum picks up steam, the 32633 level could attract bears to participate in a down move. 

Zusammenfassung  

The last significant risk scenario was a possible U.S. Debt Default, which is now resolved and paves the way for the market to return to a risk-on mode. The Dow Jones 30 Futures will likely pick up upside momentum, especially if the Federal Reserve pauses rate hikes in the 13-14 June meeting. The 33865 level will probably come into play as risk appetite drives the index higher.  

Quellen: Reuters, TradingView