The US 30 index is trading below the six-month high of 26,712, struggling within the Ichimoku cloud and the between the 50- and 200-simple moving averages (SMAs). The index is on the back foot and the technical indicators suggest that the market could ease a little bit in the short-term; the MACD is flattening in the negative zone, while the stochastic looks be losing momentum.
In case of a correction lower, preliminary support may be initially found near 25,500 which is where the 23.6% Fibonacci retracement level of the upleg from 21,596 to 26,712 and the 200-day SMA are currently located. Falling towards 25,220, the medium-term picture would shift from bullish to neutral as well as touch the 38.2% Fibonacci of 24,754.
On the other hand, if the bulls take control, immediate resistance could come around the 50-day SMA currently at 26,072. If buyers pierce above that, the next obstacle may be the six-month high of 26,712, where the rally topped on April 24.
Summarizing, in the near-term, the momentum indicators point to a possible bearish retracement and if there is a drop below 25,220, this could open the door for further losses.
