September E-mini Dow Jones Industrial Average futures are trading lower shortly after the cash market opening. The market has been under pressure since Friday when a stronger-than-expected U.S. Non-Farm Payrolls report lowered the chances of a late July Federal Reserve rate cut, encouraging investors to trim positions.

This week, traders are a little nervous ahead of key testimony by Fed chief Jerome Powell. He is scheduled to testify in front of the House Financial Services Committee on Wednesday, and the House Banking Committee on Thursday. Investors are hoping he sheds some light on whether central bank policymakers will cut rates on July 31, as it is widely expected, or if the central bank thinks the economy is strong enough to maintain current economic policy.

At 13:40 GMT, September E-mini Dow Jones Industrial Average futures are trading 26699, down 94 or -0.34%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the potentially bearish closing price reversal top at 27009 on July 5.

A trade through 27009 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 26445.

The short-term range is 26445 to 27009. Its retracement zone at 26727 to 26660 is currently being tested. Trader reaction to this zone should determine the near-term direction of the Dow.

The main range is 25897 to 27009. Its retracement zone at 26440 to 26311 is the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at 26669 and the short-term Fibonacci level at 26660.

Bullish Scenario

Holding 26669 and sustaining a rally over this angle will indicate the presence of buyers. The first upside targets are the short-term 50% level at 26727 and the steep downtrending Gann angle at 26753. Sellers could come in on the first test of these levels, but taking out 26753 could trigger an acceleration to the upside with the next target dropping in at 26881.

Bearish Scenario

A sustained move under 26660 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with the next target angle coming in at 26977. This is the last potential support angle before the main bottom at 26445, the longer-term uptrending Gann angle at 26441 and the main 50% level at 26440. This is a major support area today.