E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing Major Support at 34481 – 34257

·2 min read

December E-mini Dow Jones Industrial Average futures are under pressure late in the session on Friday. The selling actually started early in the session as investors expressed caution due to a resurgent COVID virus that remains a threat to the U.S. economic recovery, the Federal Reserve’s tapering decision next week and a general tendency to dump stocks in September.

At 19:02 GMT, December E-mini Dow Jones Industrial Average futures are trading 34452, down 174 or -0.50%.

The Federal Reserve meets for two days next week and on Wednesday is expected to give further clues as to when it may start to slow its $120 billion in monthly bond purchases that have supported the recovery, but also perhaps aided in a jump in inflation.

Daily December E-mini Dow Jones Industrial Average
Daily December E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 34379 will signal a resumption of the downtrend following the closing price reversal top on September 15.

A trade through 35383 will change the main trend to up. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement of the current sell-off.

The minor trend is also down. A trade through 34826 will change the minor trend to up. This will also shift momentum to the upside with additional minor tops coming in at 34907 and 35076.

The main range is 33533 to 35429. The E-mini Dow is currently testing its retracement zone at 34481 to 34257. This zone could be controlling the near-term direction of the market.

The first minor resistance is 34728. This is followed by a second minor resistance zone at 34881 to 34999.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average into the close on Friday is likely to be determined by trader reaction to the main 50% level at 34481.

Bullish Scenario

A sustained move over 34481 will indicate the presence of late session buyers. If this move creates enough upside momentum then look for a surge into 34602, followed closely by 34728.

Bearish Scenario

A sustained move under 34481 will signal the presence of sellers. Taking out 34379 will reaffirm the downtrend with the Fibonacci level at 34257 the next key target.

Look for an acceleration to the downside if 34257 is taken out with strong selling pressure. The daily chart indicates there is no major support until the July 19 main bottom at 33533.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire