Key points:
The Dow Jones Industrial Average (Symbol: DJ30) surged to a new all-time high, closing above 41,600.
Picture: The Dow Jones Industrial Average hits record high above 41.600, as observed on the VT Markets app.
The DJ30 index closed at 41,726, climbing past previous highs as traders embraced the bullish sentiment driven by expectations of a more accommodative monetary policy stance from the Federal Reserve. The moving averages suggest that momentum is still strong, with the 24-period EMA leading the charge and remaining above both the 50 and 72-period averages.
The MACD indicator shows positive momentum, though the histogram is starting to flatten out, potentially signalling a pause in the upward trend. If resistance near 41,735 holds, we might see a minor pullback before testing the next key level. However, if the positive sentiment around further monetary easing continues, the DJ30 could build more gains, supported by technical strength and market optimism.
Support remains around the 41,200 mark, which corresponds to a previous consolidation area. If selling pressure increases, traders will be watching this level closely to determine whether it holds as a base for further upward movement.
The Federal Reserve is widely expected to cut interest rates, though the scale of the cut remains uncertain. Speculation has grown that the Fed could reduce rates by either 25 or 50 basis points, with markets now leaning towards the latter.
Related content: Interest rate tug-of-war for central banks
According to the CME FedWatch Tool, the odds of a 50-basis-point cut have risen to 63%, up from 50% last Friday.
For short-term traders, the market is set for potential volatility as investors react to the Federal Reserve’s decision on Wednesday.
A more aggressive rate cut could fuel further stock gains, but proper risk management is advised, as a smaller cut may lead to profit-taking and downside risk.
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