E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 28059 Sets the Tone

December E-mini Dow Jones Industrial Average futures are edging higher at the mid-session on Wednesday on hopes that Federal Reserve policymakers would continue to keep interest rates lower over the long-run, while a slide in tech-related stocks may be limiting gains.

The Fed’s two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.

At 16:07 GMT, December E-mini Dow Jones Industrial Average futures are trading 28096, up 188 or +0.67%.

Mixed data has also kept investors on edge about the pace of an economic recovery as the latest figures showed U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining.

Dow components Apple Inc and Microsoft fell between 0.5% and 1.3%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 27068 will signal a resumption of the downtrend. The main trend changes to up on a move through 29050.

The short-term range is 29050 to 27068. Its retracement zone at 28059 to 28293 is currently being tested for a second straight session. Trader reaction to this zone will determine the near-term direction of the Dow.

The current minor range is 27068 to 28128. Its retracement zone at 27598 to 27473 is a potential downside target.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini Dow Jones Industrial Average futures contract into the close is likely to be determined by trader reaction to the 50% level at 29059.

Bullish Scenario

A sustained move over 28059 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible surge into the Fibonacci level at 28293. This is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 28059 will signal the presence of sellers. They are trying to form a potentially bearish secondary lower top. If successful, this could lead to a break into its retracement zone at 27598 to 27473.

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