Vaccine and stimulus hopes are driving the Dow Jones Industrial Average higher this Friday, despite the downbeat Non-Farm Payrolls report. The markets had expected a much lower employment change, and this NFP metric did not disappoint, registering an addition of 245K jobs as opposed to last month’s 610K and the consensus of 480K. However, a lower unemployment rate of 6.7% offset the grim employment change number and allowed the investors on the Dow to focus on further stimulus and coronavirus vaccine hopes.
The US Congress plans a $908 billion coronavirus deal, which is getting bipartisan support. The markets are also hailing the OPEC + decision to eliminate oversupply risks by gradually withdrawing production curbs. Thus, the Dow is now trading above the 30101 resistance on the strength of increased risk flows.
Technical Levels to Watch
The Dow Jones average is now challenging the triangle’s upper border as a breakout move seems imminent. A 3% penetration close above this border at 30101 allows the Dow to challenge the all-time high posted on 25 November at 30124. A push above this area is likely to make a pitstop at 31158 (78.6% Fibonacci extension from the swing motion of 13 May to 3 September). 32505 appears to be another likely target for the future as the breakout move aims to find its projected price point from the triangle’s base height.
On the other hand, rejection and breakdown of the triangle’s lower boundary negate the bullish break and opens the door towards new targets at 29255 and possibly 28979. 28746 and 28195 remain viable targets to the south.
Dow Jones Daily Chart