The DJIA hit an all-time high of 42,063.36 after the Fed’s 50 bps rate cut. This represents a notable change in the market as investors respond to the central bank’s decision to decrease interest rates to the 4.75%—5.00% range. Analysts had forecast a smaller 25 bps cut, but the actual cut exceeded expectations.
The reduction in interest rates has increased confidence among investors, leading to a positive impact on the Dow Jones Index due to a newfound trust in the potential for economic growth.
The chart highlights a clear breakout above a critical resistance level at 41,590.90, which had been acting as a ceiling for the price. The Dow has now moved past this level, signalling strong bullish momentum.
On the downside, the key support levels are 39,999.8 and 37,733.23. Should there be a pullback, buyers could step in to prevent further declines.
The consistent formation of higher highs and lower lows shows that the market has been in a robust uptrend since July, following a bounce from the 37,733.23 level. This is indicative of sustained bullish pressure.
Given the strength of this breakout, the next potential target for the Dow Jones could be around the 43,000 mark. The RSI shows moderate levels, meaning there’s still room for the price to rise further without immediately hitting overbought conditions. This technical setup suggests that if the Dow manages to maintain above 41,590.90, it could push toward new highs. However, a pullback to the 39,999.83 support could test the market’s strength if selling pressure returns.
Investors eagerly anticipate indications of additional interest rate reductions in the near future as they analyze the Federal Reserve’s recent actions. The Dow Jones Industrial Average is still a crucial gauge of market sentiment, and changes in Federal Reserve policy will strongly influence its success.
This post was last modified on Sep 23, 2024, 15:00 BST 15:00