The US 30 index has plunged sharply lower since Friday losing more than 3000 points from the last all-time high on January 29. The price posted a new more than 3-month low of 23116.40 earlier today, however, it later reversed some of its losses during the European session.
Prices broke below the 23.6% Fibonacci retracement level near 24000 of the up-leg with the low of 15250 and the high of 26700. The bullish picture in the medium-term weakened and a bearish correction is in progress.
Short-term indicators are also pointing to a continuation of the bearish bias. The RSI indicator entered the oversold area following the pullback from the overbought zone. Also, the MACD oscillator dropped below the zero line with an aggressive move.
Should prices reverse lower, immediate support could come again at 23220, which it hit earlier in the day. A drop below this area could take the index closer to the 38.2% Fibonacci mark slightly above the 22200 strong support level. A breach of this level would shift the outlook from positive to negative.
On the flip side, if prices reverse and jump above the 23.6% Fibonacci could open the way towards the next key resistance at 24500. Rising above the aforementioned obstacle could see prices re-test the all-time high at 26700.
