Caution Rises with Fed, GDP, and Global Events in Focus

Markets enter a pivotal stretch with several high-impact events on the horizon. Central bank decisions, U.S. growth and inflation data, Canada’s GDP release, and Australia’s parliamentary elections are all lined up to shape sentiment heading into the weekend. At the same time, Wall Street’s recent pullback underscores growing investor caution after extended gains, making upcoming data releases and policy signals especially critical for traders assessing the near-term direction of equities and currencies.

High Impact Economic Events

Thursday 10:30 am (GMT+3) – Switzerland: SNB Policy Rate (CHF)

Thursday 15:30 (GMT+3) – USA: Final GDP q/q (USD)

Thursday 15:30 (GMT+3) – USA: Unemployment Claims (USD)

Friday 15:30 (GMT+3) – Canada: GDP m/m (CAD)

Friday 15:30 (GMT+3) – USA: Core PCE Price Index m/m (USD)

Saturday All Day – Australia: Parliamentary Elections (AUD)

Chart Analysis

Since establishing a low at 36,486.13 on April 7, the Dow Jones Industrial Average has advanced more than 28% (trough to peak), confirming a strong recovery phase. The early signal of a trend reversal came through a bottom failure swing pattern, marked by a higher low at 37,826.60 and a subsequent breakout above 40,921.23. This sequence confirmed a bullish structural shift and set the groundwork for further upside potential.

Technical confirmation was reinforced by the formation of a Golden Cross, where the 20-period EMA crossed above the 50-period EMA, typically regarded as a medium-term bullish development. Supporting this view, momentum indicators continue to validate the trend: the Momentum Oscillator remains above the 100 line, highlighting strength, while RSI holds comfortably above 50, consistent with a sustained bullish bias.

However, caution is warranted. A negative divergence between price and the Momentum Oscillator signals that underlying momentum may be softening. While the broader outlook remains constructive, this divergence should be closely monitored for early signs of potential trend fatigue. Currently, the DJIA has fallen for a second straight session, down 1.35% from Tuesday’s high.

Key Resistance Levels

If buyers maintain control of the market, traders may shift their focus to the following four potential resistance levels:

46,743.58: The first level of resistance is projected at 46,743.58, which aligns with the daily high marked on September 23.

47,303.09: The second price target is seen at 47,303.09, corresponding to the weekly resistance, R3, calculated using the standard Pivot Points methodology.

47,945.52: The third upside target is noted at 47,945.52.

48,458.64: An additional upside target is determined at 48,458.64, reflecting the 423.6% Fibonacci Extension drawn from the high point, 45,771.59, to the low point, 44,941.49.

Key Support Levels

If sellers take control of the market, traders may focus on the following four key support levels:

44,123.96: The initial support level is positioned at 44,123.96, aligning with the weekly Pivot Point, PP, calculated using the standard methodology.

45,771.79: The second support level is seen at 45,771.79, representing the high point from August 22.

44,941.49: The third downside target is noted at 44,941.49, corresponding to the trough formed on September 2.

44,504.03: An additional downside target is determined at 44,504.03, reflecting the daily high marked August 7.

Fundamentals

Wall Street benchmarks slipped for the second straight session on Wednesday, with the Dow Jones losing 170 points and broader selling hitting Nvidia and Oracle. Investors trimmed positions after Fed Chair Jerome Powell warned equities are “fairly highly valued,” while analysts noted markets look expensive on nearly all valuation metrics. A US-based investment bank and financial services company flagged an unfavorable short-term risk-reward. At the same time, a Japanese financial services group headquartered in Tokyo advised bulls to hedge.

Despite the broader pullback, Intel jumped 6% on reports it is in talks with Apple for a potential investment, extending its YTD gains to 55%. Lithium Americas, a mining and materials company focused on developing lithium projects, mainly for use in electric vehicle (EV) batteries and energy storage, surged nearly 95% after reports the Trump administration may take an equity stake as part of a $2.2 billion loan deal. Attention now turns to upcoming Fed speeches and key economic data, including GDP revisions, jobless claims, and durable goods orders.

Conclusion

Overall, the market backdrop remains constructive but increasingly cautious. Technical signals point to a bullish structure in the Dow Jones, yet divergences highlight the risk of momentum fatigue. With major economic releases and political events ahead, volatility may rise as traders weigh stretched valuations against supportive macro themes. In the near term, both resistance and support levels outlined will serve as key markers for direction, with sentiment likely to be driven by the tone of Fed commentary and incoming data.