E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Could Regain Strength Over 34132

December E-mini Dow Jones Industrial Average futures are edging lower in early morning trading on Monday as traders prepare for Friday’s U.S. Non-Farm Payrolls report and the start of earnings season later in the month.

Investors are hoping for a rebound in the market following last month’s abysmal performance, which was fueled by fears of inflation, Federal Reserve tapering and rising interest rates. Chinese developer Evergrande and COVID-19 could keep investors cautious.

At 07:16 GMT, December E-mini Dow Jones Industrial Average futures are trading 34076, down 91 or -0.27%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may be getting ready to shift to the upside with the formation of a closing price reversal bottom on Friday.

A trade through 34354 will confirm the closing price reversal top and shift momentum to the upside.

The main trend will change to up on a trade through 34934. A move through 33383 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 32835 to 35429. The E-mini Dow is currently trading inside its retracement zone 34132 to 33826. This zone is controlling the near-term direction of the market.

The short-term range is 35383 to 33383. Its retracement zone at 34383 to 34619 is resistance and a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow on Monday is likely to be determined by trader reaction to 33868.

Bearish Scenario

A sustained move under 33868 will indicate the presence of sellers. The first downside target is the main Fibonacci level at 33826. Taking out this level could trigger an acceleration to the downside with 33383 the primary target. If this level fails as support then look for the selling to possibly extend into the June 21 main bottom at 32835 over the near-term.

Bullish Scenario

A sustained move over 33868 will signal the presence of counter-trend buyers. Overtaking and holding the main 50% level at 34132 will indicate the buying is getting stronger. This could trigger an acceleration into the short-term retracement zone at 34383 to 34619. Trader reaction to this area is likely to determine the direction of the Dow the rest of the week.

Side Notes

A pair of retracement zones are likely to be tested throughout the week as investors decide whether to build a new support base or another secondary lower top. They come in at 34132 – 33826 and 34383 – 34619, respectively.