Last week, the main US stock indices hit new record highs. The Dow Jones Industrial Average set an all-time high and closed at 34162.0 on Friday. It has been its 21st high since the beginning of 2021. Meanwhile, the S&P 500 closed at 4180.0, reaching its 23rd high this year.

Last week, the rally in the US stock markets was supported by a good start of the earnings season, as well as positive macroeconomic data that confirmed rapid economic growth.

According to the report published on Thursday, US retail sales increased by 9.8% in March, beating the forecast for a 5.9% rise. In February, the reading fell by 2.7%. In addition, the Labor Department presented its weekly unemployment statistics that revealed a drop in initial jobless claims to 576K from 769K, which was well below market expectations of 700K. The manufacturing PMI (50.2) also exceeded market expectations (42.0). The indicator above the 50 mark shows the expansion of the economy, which has a general positive influence on the national currency.

The DJIA stocks that recorded highest growth are Cisco Systems Inc. (+2.25%), Home Depot Inc. (+1.65%), Johnson & Johnson Co. (+1.15%), and Goldman Sachs Inc. (+1.11%). The Bank of America reported its quarterly sales of $22.93 billion, which beat analysts' estimates. Its quarterly earnings of $0.86 per share are the highest in recent years. Morgan Stanley announced earnings per share of $2.22 for revenue of $15.72 billion, which is above analysts' expectations of $1.72 per share.

The DJIA gained 1.2% and the S&P 500 soared by 1.4% last week, growing for the fourth consecutive session. The Nasdaq Composite was up by 1.1%, finishing higher for the third session in a row.

US stocks futures edge higher on Monday. They are also likely to rise at the start of the North American trading session.

Meanwhile, the greenback is incurring losses. At the moment of writing, the US dollar index was trading near the 91.15 mark, which is 230 pips lower that the local 4-months high recorded at the end of March.

The US dollar remains weak because of the Fed's stimulus program. Since the end of June 2020, the Fed has been buying at least $120 billion a month of Treasury debt and mortgage-backed securities until "substantial further progress" is made in the recovery. During its March meeting, the Fed's officials announced their decision to keep interest rates near zero until 2023 and maintain the current pace of asset purchases. Despite a rapid vaccine rollout, the coronavirus situation in the US is still alarming. Meanwhile, the government's trillion dollars stimulus packages pave the way for a further depreciation of the greenback.

US Treasury yields also decline, placing the dollar under additional pressure.

This week, the Board meetings on the Bank of Canada and the ECB are on the agenda. The European regulator will announce its decision on interest rates on Thursday.

Today, the macroeconomic calendar is empty.

Nevertheless, the US stocks, including the DJIA, are likely to keep rising, while the US dollar is expected to continue falling.

At the same time, the US stock market seems to be overheated.

Investors keep buying shares that should rise amid growing inflation and economic activity. Extremely positive sentiment may indicate that investors have been wrong when they excluded such risks as an increase in government bond yields, an aggravating epidemiological situation, the lack of labor force, and a possible escalation of geopolitical tensions from their assessments.

Technical analysis and forecast:

The Dow Jones Industrial Average gained 1.2% for the previous week. On Friday, the DJIA futures reached an all-time high of 34251.0. During early European trading hours on Monday, they are trading in the range near the 34100.0 mark, staying in the zone above the key support level of 30150.0 (EMA 200 on the daily chart) and remaining within the ascending channels on the daily and weekly charts.

The US and world stock markets are bullish owing to rising optimism fueled by the effort of the Fed and other leading central banks that cut interest rates to near-zero levels.

From the fundamental and the technical points of view, it can be assumed that the DJIA will keep on climbing higher.

Alternatively, traders should consider entering short positions after a breakout of the support levels at 33743.0 (EMA 200 on the H1 chart) and 32976.0 (EMA 200 on the H4 chart). The very first signal that should alert buyers will be a breakout of the short-term support level at 34033.0 (EMA 200 on a M15 chart).

News about another spike in the infection rate or an economic slowdown may lead to a fall in the stock market.

So far, the market has been bullish.

Support levels: 34033.0, 33743.0, 32976.0, 30850.0, 30150.0, 29200.0, and 28700.0

Resistance levels: 34251.0 and 35000.0

Trading recommendations:

Buy Stop: 34255.0; Stop Loss: 33990.0; Take Profit: 35000.0 and 36000.0

Sell Stop: 33990.0; Stop Loss: 34255.0; Take Profit: 33743.0, 32976.0, 30850.0, 30150.0, 29200.0, and 28700.0