The Dow Jones-30 Industrial Index (#INDU) is trading under strong downward pressure.
Early in the American session, Wall Street indices are falling after their strong performance on Tuesday. The positive US retail sales data support expectations that the Fed could tighten its monetary policy at its next meeting in June.
On Tuesday, the Federal Reserve Chairman said that the central bank would continue to raise interest rates until inflation is under control. This hawkish rhetoric fueled risk aversion and made investors take refuge in the US dollar. So, the Dow Jones began its fall again.
Having tested the top of the downtrend channel formed on April 20, the DJ30 is falling. It is now trading below the 21 SMA and below 1/8 Murray.
On the 4-hour chart, we can see that the Dow Jones-30 left a bullish GAP at around 31,700. If the downward pressure continues, it is likely to reach and cover this GAP in the next few hours.
The 4-hour chart clearly shows strong downward pressure on the Dow Jones. However, the index is likely to find support at around 31,700. This level could offer a good technical bounce to buy with targets at 32,300.
Our trading plan for the next few hours is to sell the Dow Jones-30 in case of a pullback to the 21 SMA at around 32,300 or buy after it covers the gap at around 31,700. The eagle indicator is in the positive zone. It is likely to resume its upward trend in the coming days.
