Dow Tests 50-Day Average

Sentiment seems negative in the markets, ahead of the US President Joe Biden and Chinese President Xi Jinping virtual meeting. Reports are that Joe Biden will tell Xi Jinping that Beijing will pay a price if it supports Russia in its Ukraine invasion.

From the technical perspective, the Dow currently trades above previous swing highs of 34,120 USD, making the short-term outlook somewhat bullish. If the price remains above that support, we might see further rallies, especially if the mentioned Biden-Jinping call ends positively.

In that case, the next target could be near the psychological level of 35,000 USD, where previous highs are also located. 

Alternatively, the intraday support is at 34,120 USD, and if not held, we might see a leg lower toward the post-FOMC lows near  33,440 USD. 

Volatility is expected to be elevated heading into the weekend.