Dow Jones (INDEXDJX: DJI) Index is losing steam after a strong bounce from the August lows. On Monday, the benchmark index remained sideways as the investors awaited the key FOMC decision scheduled on Wednesday. At the time of writing, the index stood at 34,626 points without showing any significant gain or loss.
The US equities showed a strong rebound from their last week’s close in the opening hours of Monday. However, the sellers prevailed once again, and the benchmark indices lost their initial gains. Dow Jones Industrial Average was up by 18 points till press time.
Fed To Keep Rates Constant This Week
The US Federal Reserve is set to decide on the interest rates in the country on Wednesday. According to the CME Fed Watch Tool, there’s only a 3% chance of a rate hike in this week’s FOMC meeting. Nevertheless, the market will remain volatile in the coming days.
Earlier this month, the US stock market continued its rally despite a more-than-expected rise in inflation during August 2023. This suggests that the upcoming FOMC decision might already be priced in. The most important factor will be the tone of the Fed Chair in his FOMC conference.
Dow Jones Index Fails To Break 35,000 Points
The INDEXDJX: DJI chart shows that the index is struggling to break above the 35,000 resistance level. This suggests that the bears may target the 34,250 level in the coming weeks. This will be a key retest to watch as a breakdown below this level may turn the Dow Jones Index forecast bearish.
A retest of the 34,250 level will remain on the cards as long as long as the index remains below 35,630 points. Despite expectations of a pause in rate hikes, the job market is not looking very strong. Due to the sticky inflation, which is still at 3.7%, analysts expect another rate hike before the end of this year.
I’ll keep posting my updated DJI analysis and my personal trade setups on Twitter, where you are welcome to follow me.
