Since the fall around the 34,500 zone on August 18, the Dow Jones Industrial Average #INDU has managed to recover thanks to the good results of companies such as Caterpillar (1.56%), Dow Inc (1.43%) and Chevron (1.42%) in addition to others.
The market is waiting for the outcome of the meeting of central bankers that usually takes place in Jackson Hole to get some clues on monetary policy. This time the meeting is scheduled on Thursday.
Also coming is Jerome Powell's important speech at the Jackson Hole Economic Symposium on Friday. He could announce details about the Federal Reserve's bond purchase program and when the reduction will begin.
Undoubtedly, the Dow Jones will be very volatile this weekend. Given that the technical indicators are showing an overbought signal, it is likely that before the weekend there will be a technical correction ahead of the publication.
According to the 1-hour chart, the Dow Jones is trading below the SMA of 21. This moving average exerts downward pressure and the eagle indicator is generating an overbought signal. We believe that a fall to the key support of 35,180 may occur.
Murray's 6/8 line and 200 EMA on the 1-hour charts are now acting as strong support for the Dow Jones. A technical bounce around this level could be an opportunity to buy with the targets at 35,380 and 35,546 (7/8).
On the contrary, if the market turns bearish, we will have to wait for a break below 35,150 and a consolidation. Then we will be able to sell with the targets at 34,765 (5/8).
Support and Resistance Levels for August 24 - 25, 2021
Resistance (3) 35,591
Resistance (2) 35,458
Resistance (1) 35,408
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Support (1) 35,215
Support (2) 35,103
Support (3) 34,881
