(MENAFN– Daily Forex) The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses for the third consecutive day, by -2.73%, to lose the index towards -880.00 points. It settled at the end of trading at the level of 31,392.80, after its decline during Thursday’s trading by – 1.94%. During the past week, the index declined by -4.58%, to lose throughout the week -1,506.91 points.
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Friday’s dip comes after shares were sold off Thursday afternoon, after the Labor Department reported Friday that its consumer price index rose 8.6% annually in May, above the expected 8.3% increase and the April result of 8.3%.
Some of the higher inflation has been driven by sharp price increases in the services sector, which accounts for the slight majority of the CPI. Consumers are shifting their spending away from the goods they bought for their homes during the pandemic, the ones they can get as the world reopens. Air ticket prices are up 38% year over year, while hotel prices are up 19%.
Markets had been hoping to see inflation abate. A rapid decline could have meant the Fed would likely slow the pace of rate hikes. Markets recently had a few days of hope that the Fed might soon slow down in raising rates, but This novel seems far fetched at the moment.
Technically, the short-term corrective bearish trend is dominated by the range of its price channel , as shown in the attached chart for a (daily) period, with the influx of negative signals on the relative strength indicators . This is after they reached earlier areas of overbought areas, exaggeratedly compared to the movement of the index, The index continues to suffer from the continuous negative pressure, as it trades below the simple moving average for the previous 50 days.
Therefore, our negative expectations are still surrounding the index during its upcoming trading , especially throughout its stability below the 32,000 level, to target the first major support levels at 31,000.
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