E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Could See Late Test of 35652 – 35741

March E-mini Dow Jones Industrial Average futures are attempting to turn higher late Wednesday following the release of the Federal Reserve’s interest rate decision and monetary policy statement.

The blue chip index fell early in the session as recent readings on inflation sealed expectations of a speedier reduction of the central bank’s pandemic-era monetary stimulus.

At 19:06 GMT, March E-mini Dow Jones Industrial Average futures are trading $35519, up 71 or +0.20%. This is up from an intraday low at 35274.

Ahead of the Fed announcements, the U.S. central bank was widely expected to signal a faster end to its bond-buying campaign and a quicker start to raising interest rates at its meeting.

The E-mini Dow cut its losses and moved higher as investors digested the latest move from the Fed. Policymakers announced on Wednesday that it would wind down its asset purchases at a faster pace amid a continued rise in inflation. The central bank also signaled that its members expected three hikes in 2022.

The Fed will conclude its two-day policy meeting on Wednesday and the public will hear from central bank Chairman Jerome Powell at a 19:30 GMT news conference. Traders should look for volatility at that time since Powell has been known to move the markets in the past.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 36030 will change the main trend to down. A move through 33860 will signal a resumption of the downtrend.

The minor trend is also down. A trade through the intraday low at 35274 will indicate the selling pressure is getting stronger.

The new minor range is 36030 to 35274. Its retracement zone at 35652 to 35741 is the nearest upside target. Trader reaction to this zone will set the tone into the close.

The short-term range is 33860 to 36030. Its retracement zone at 34945 to 34689 is the first downside target.

The main range is 33300 to 36330. Its retracement zone at 34815 to 34457 is the major downside target. This zone is controlling the longer-term direction of the market.

Short-Term Outlook

The direction of the March E-mini Dow Jones Industrial Average into the close on Wednesday will be determined by trader reaction to 35448.

Bullish Scenario

A sustained move over 35448 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the minor retracement zone at 35652 to 35741.

Since the main trend is down, sellers are likely to come in on the first test of 35652 to 35741. They are going to try to form a potentially bearish secondary lower top.

Taking out 35741 will indicate the buying is getting stronger with 36030 the next upside target.

Bearish Scenario

A sustained move under 35448 will signal the presence of sellers. If this generates enough downside momentum then look for a break into 35274.

The intraday low at 35274 is a potential trigger point for an acceleration to the downside with the next targets a series of retracement levels at 34945, 34815 and 34689.