Our expectations indicate that the index will continue to decline during its upcoming trading.
The Dow Jones Industrial Average declined in its recent trading at the intraday levels, to record losses for the fourth consecutive session, by -1.42%. The index lost about -482.57 points to settle at the end of trading at the level of 33,596.62, after its decline in trading on Thursday by -0.68% .
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During recent index trading, investors’ initial response was to Russian President Vladimir Putin’s decision to order troops to storm separatist regions in Ukraine, escalating tensions and raising fears of a full-scale invasion.
Markets in the US were closed on Monday in observance of the Presidents’ Day holiday, with trading on Tuesday providing the first opportunity for investors to react to developments in Eastern Europe.
US President Joe Biden said on Tuesday that the United States would impose sanctions on two Russian banks in addition to the country’s sovereign debt, as he blamed Moscow for what he called the start of the invasion of Ukraine. It comes after Biden on Monday issued an executive order banning investment, trade and new financing by Americans in breakaway regions where Russia has sent troops.
Analysts say the market has reacted moderately to many concerns about potential direct or indirect effects, such as World War Three or recession fears, with many believing the confrontation over Ukraine will be limited. This is why inflation concerns and monetary policy tightening by the Federal Reserve are actually driving the reassessment of assets.
Technically, the index continued its decline in its recent trading amid the dominance of a bearish corrective wave in the short term, with continuous negative pressure for its trades below the simple moving average for the previous 50 days, in addition to the influx of negative signals on the relative strength indicators, despite reaching oversold areas.
The index, with its recent decline, broke a short-term bullish trend line, as shown in the attached chart for a (daily) period, coinciding with breaking the main support level 34,000, to settle below it for the first time since December 30th.
Therefore, our expectations indicate that the index will continue to decline during its upcoming trading, especially as long as its stability is below the 34,000 level, to target the first important support levels at 33,271.90.
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