Technical Analysis – US 30 index takes a breather around 123.6% Fibonacci extension

The US 30 stock index (Cash) is currently edging sideways around the mostly neutral red Tenkan-sen line however, the bullish bias remains potent. The climbing simple moving averages (SMAs) are safeguarding the bigger bullish structure, while the relatively stable Ichimoku lines are reflecting a period of paused directional drive.

The short-term oscillators are transmitting signals of waning positive momentum; however this is not sufficient to suggest a more aggressive pullback in the price. The MACD is still in the bullish section but is trailing below its red trigger line, while the RSI is rebounding ahead of the 50 threshold. Endorsing weakness in the index is the stochastic oscillator, which has turned increasingly negative.

If selling interest increases, initial key support could develop from the 50-period SMA at 33,265 until the 33,175 barrier. If the price dives into the Ichimoku cloud, next downside limitations may transpire from the 100-period SMA at 33,005 before sellers challenge another critical support section of 32,800-32,876.

In the positive scenario, if buyers drive the price over the red Tenkan-sen line at 33,408, early resistance could emanate from the 33,500 mark until the all-time high of 33,616, the former being the 123.6% Fibonacci extension of the down leg from 33,229 until 32,068. Piloting into uncharted waters, the index could then possibly encounter upside friction around the 150.0% and 161.8% Fibonacci extensions at 33,811 and 33,943 respectively.

Summarizing, the US 30 index is sustaining a bullish tone above the SMAs and the 33,175-33,265 support zone. A shift below the 32,068 trough could start to undermine the bigger positive picture.

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