Technical outlook:
The Dow Jones dropped through the 30,930 level on Tuesday as risk assets retraced their gains against the US dollar. Potential still remains for a further drop towards the 30,500 mark before the index finds support and turns higher again. Bulls are now poised to hold prices above the 29,600 interim support to keep the near-term structure intact.
Dow Jones has already carved a meaningful larger degree downswing between the 36,952 and 29,600 levels since January 2022. The recent three-wave decline looks complete at the 29,600 mark as bulls prepare for a corrective rally soon. Please note that the above decline could be the beginning of a larger corrective drop that could drag the price further down in the coming months.
The Dow Jones has further carved a potential lower degree upswing between 29,600 and 31,885 in the past few trading sessions. Prices are retracing from the above rally for now and the potential remains for the drop to extend towards the 30,500 level before finding support. Also note that 30,500 is close to the Fibonacci 0.618 retracement of the above upswing and hence a high probability for a bullish reversal remains.
Trading plan:
Potential rally through 32,500 against 29,600
Good luck!
