Dow Jones (DJIA) futures are holding steady ahead of the Fed interest rate decision. They are trading at $32,826, which is 81% above the lowest level last year. The S&P 500 and Nasdaq 100 index are also rising while the fear and greed index has tilted towards the greed zone.
What happened: The Dow Jones has rallied substantially since last week when the US published the latest inflation numbers. The data showed that both consumer and producer prices did not rise as steeply as what analysts were expecting.
Still, some analysts believe that the overall inflation will keep rising. In an interview with Bloomberg yesterday, Bill Gross, the founder of PIMCO, said that he expects the rate to rise to 4% this year. Later today, the Fed is expected to leave interest rates and the quantitative easing unchanged.
Meanwhile, the fear and greed index points to more upside for the Dow Jones. It has moved from the neutral level of 50 last week to the current greed zone of 56. This means that the situation in the market is not extremely greedy, which is a sign that the index will keep rising.
Fear and greed index chart
Dow Jones technical forecast
On the four-hour chart, we see that the Dow Jones index has been on a strong rally. The index made the milestone of rising above the upper side of the ascending channel on March 11. It remains above the short and longer-term moving averages while the RSI has moved close to the overbought zone.
Therefore, in my view, the upward trend will continue as bulls attempt to move above the next psychological level of $33,000. However, a drop below $32,000 will invalidate this trend.
Dow Jones chart