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Wall Street opens lower due to the negative data from China and uncertainty about the withdrawal of monetary stimulus by the Fed. The daily chart of the Dow Jones shows overbought levels, and investors are likely to take earnings ahead of the minutes of the last FOMC meeting.
Investors are concerned about the increase in Covid-19 cases this time caused by the aforementioned variable Delta. Last week's data shows that US consumer confidence has sunk, something that could weaken the bullish bias of the Dow Jones.
In addition, the FOMC minutes will be published on Wednesday. Investors are waiting for these minutes to get some signal about the intentions of the US central bank in relation to the start of the rollback of the monetary stimulus program.
The Dow Jones #INDU has left a technical reversal pattern called the double top at the 35.612 area. This is a sign of a correction and a bearish movement for the next few hours.
The graph shows that the Dow Jones is trading within an uptrend channel formed on the 4-hour charts. A breakout of this channel could accelerate the fall of the Dow Jones towards the 6/8 murray line located at 35.156.
A technical bounce can occur at the murray 6/8 support line. It could be a good opportunity to buy around this zone.
On the contrary, if the downward force prevails, we expect a downward movement. For this, we must wait for a break and consolidation below 35.156, the objective can be located in the area of the 200 EMA located at 34.922.
As long as the Dow Jones 4-hour chart is trading below the 21 SMA at 35.473, the bearish pressure combined with the formation of the double-top pattern could continue to push the Dow Jones lower.
The technical reading of the eagle indicator that measures the volume and strength of the market is showing a bearish signal, thus supporting our bearish outlook.
Support and Resistance Levels for August 17 - 18, 2021
Resistance (3) 35,889
Resistance (2) 35,734
Resistance (1) 35,514
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Support (1) 35,341
Support (2) 35,141
Support (3) 34,938
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