In the first week of July 2025, U.S. financial markets are closely watching the Non-Farm Payroll (NFP) report and recent Fed members’ speeches.
The NFP data showed stronger-than-expected job growth, with the unemployment rate holding steady at 3.9%. This signals a still-hot labor market, giving the Federal Reserve more reason to maintain higher interest rates for longer.
Additionally, New York Fed President John Williams stated that the central bank is not in a hurry to cut rates as inflation remains above the 2% target. This dampened market expectations for a potential rate cut in the September meeting.
Despite the bullish sentiment from corporate earnings, the hawkish tone from the Fed remains a headwind for the broader equity market.
Technical Analysis of the Dow Jones Index (DJIA)
Based on the provided daily chart, the Dow Jones index has seen a strong rally over recent weeks and is now testing a key resistance zone between 44,500 and 44,800.
Key Technical Highlights:
✅ The medium-term trend remains bullish, with price pushing above previous highs into a significant supply zone.
✅ Price has entered a multi-tested resistance area, which has historically triggered sharp rejections.
✅ A long-term ascending trendline was broken previously, and price is now retesting this trendline from below — acting as dynamic resistance.
Possible Scenarios:
🔵 Scenario 1 – Bearish Rejection / Pullback:
If we see indecision candles or a strong bearish reversal from this zone, a correction towards the 43,200 – 42,500 support range is likely.
🟢 Scenario 2 – Breakout & Continuation:
If price breaks above 44,800 with strong bullish momentum and volume, the next upside target would be around the psychological level of 46,000.
🟡 For now, buying at current levels is considered risky unless we see a confirmed breakout and close above the resistance.
Conclusion:
Despite the strong upward momentum, the Dow Jones is currently testing a critical resistance level. Combined with the uncertainty around interest rate cuts, this could lead to a short-term pullback. Traders should remain cautious and look for further confirmations before entering new positions.
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