The Dow Jones (US30) is approaching a critical support level at 44,700, and its behavior around this point could dictate market direction for the session. Without major news on the calendar, technical analysis and sentiment will play pivotal roles. Here's how to prepare for potential scenarios.
Scenario Analysis: Bearish Case:
A break below 44,700 signals bearish momentum, with possible targets at 44,500 and 44,300. Look for confirmation via high trading volume and bearish candlestick patterns like engulfing red candles or breakdowns on the 1-hour chart. Indicators: RSI moving toward oversold (<30) and MACD bearish crossover strengthen the case for further downside. Bullish Case:
If the market bounces from 44,700, it could signal a false breakdown, with resistance at 45,000 being the next target. Look for bullish price action patterns, such as hammers or engulfing green candles, and confirm with rising volume.
Key Levels: Resistance: 45,000 Support: 44,700 (critical), 44,500 (secondary) Indicators to Watch: RSI: Overbought (>70) or oversold (<30) zones to anticipate reversals. MACD: Bullish or bearish crossovers for confirmation. Volume: Validate breaks or reversals with higher-than-average activity. Trading Strategy: Sell if: Price closes below 44,700 with confirmation. Target 44,500 or lower, with stop-loss just above 44,700. Buy if: Price reclaims 44,700 or bounces decisively. Target 45,000 with stops below the support zone. Stay cautious, as market conditions during the London session can shift quickly due to liquidity changes. Use proper risk management with tight stop-losses and watch for false breakouts. Let’s see how this plays out! 🚀
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