It looks set to be a 10th consecutive day of losses for the Dow Jones Industrial Average, after a steep 1.31% fall on Friday following comments by St. Louis Fed President James Bullard in a CNBC interview covered by Reuters.
Bullard shed more light as to the FOMC’s volte-face on tapering amid rising inflation. After several FOMC board members had dismissed the rising consumer inflation data release in May as transitory, Bullard finally acknowledged in Friday’s interview that inflation was much stronger than anticipated by the apex bank. He also said the Fed would need to decide how best to taper the stimulus over several meetings.
Bullard is one of the seven FOMC members who see lift-off in 2022 to contain rising inflation.
Outlook for Dow Jones
The breakdown move of the wedge pattern on the daily chart ought to have reached the completion point for the measured move. However, the Dow Jones index finds itself pressured by the FOMC’s fundamental trigger, putting the 33271 support under pressure. A breakdown of this area allows the bears to push towards 32949, with 32363 forming an additional target to the south.
On the other hand, a bounce off the 33271 price mark allows the bulls to aim for 33621, with 34000 and 34301 forming additional targets to the north.