E-mini Dow in Position to Challenge Low of Year at 32086

June E-mini Dow Jones Industrial Average futures are down early Monday on interest rate worries and concerns about global economic growth and recession. The U.S. futures markets are also being pressured by sharp declines in Asia and Europe, pointing to a lower cash market opening at 14:30 GMT.

“A series of rate hikes and hawkish communication came against a backdrop of plummeting Chinese and European activity, new plans for Russian energy bans and continued supply-side pressures,” warned analysts at Barclays.

“This creates the gloomy prospect of persistent inflation forcing central banks to hike rates despite sharply slowing growth.”

At 08:41 GMT, June E-mini Dow Jones Industrial Average futures are trading 32392, down 417 or -1.27%. On Friday, the SPDR Dow Jones Industrial Average ETF (DIA) settled at $329.11, down $1.13 or -0.34%.

Besides concerns over interest rate hikes and recession worries, investors are also reacting to weak economic news out of China. According to a report released early Monday, wider COVID-19 lockdowns in China led to slower export growth in the world’s No. 2 economy in April.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Futhermore, the downtrend was reaffirmed when sellers took out 32358 earlier in the session.

The next target is the main bottom at 32218. A trade through 34027 will change the main trend to up.

The short-term range is 32086 to 35413. The E-mini Dow is currently trading on the weak side of its retracement zone at 33357 to 33750, making it resistance.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average early Monday is likely to be determined by trader reaction to 32809.

Bearish Scenario

A sustained move under 32809 will indicate the presence of sellers. Taking out the intraday low at 32335 will indicate the selling pressure is getting stronger. This will make this year’s main bottoms at 32218 and 32086 the primary targets.

The February 24 main bottom at 32086 is a potential trigger point for an acceleration to the downside with the March 25, 2021 main bottom at 31539 the next major target.

Bullish Scenario

A sustained move over 32809 will signal the presence of buyers. As a result, look for a possible intraday surge into the minor pivot at 33181.

Sellers could come in on the first test of 33181. However, if buyers can overcome this level then the rally could possibly extend into the short-term Fibonacci level at 33357.