E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing Major Retracement Zone at 25652 to 25898

Based on the late session price action, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the 50% level at 25652.
James Hyerczyk
E-mini Dow Jones Industrial Average

June E-mini Dow Jones Industrial Average futures are pressing their high for the session as we head into the last two hours of cash market trading on Thursday. The market continues to be driven by expectations of looser monetary policy from the U.S. Federal Reserve.

Traders seem to be numb to the lingering trade dispute between the United States and China, and the new tariffs against Mexico that are scheduled to begin on Monday, June 10, instead choosing to respond to comments from Fed Chairman Jerome Powell, who said the central bank will keep an eye on current developments in the economy, and would do what it must to “sustain the expansion.”

At 06:06 GMT, June E-mini Dow Jones Industrial Average futures are trading 25635, up 77 or +0.30%.

Daily June E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted higher on June 3 with the formation of a closing price reversal bottom and the subsequent follow-through confirmation.

The main trend will change to up on a move through 26694. A move through 24610 will negate the closing price reversal bottom and signal a resumption of the downtrend.

A closing price reversal bottom does not mean the trend has changed to up. It does often trigger the start of a 2 to 3 day counter-trend rally equal to 50% to 61.8% of the last swing down. That move was completed on Thursday. Now the fun begins.

The main range is 26694 to 24610. Its retracement zone at 25652 to 25898 is the primary upside target. Today’s intraday high is 25637.

Since the main trend is down, sellers could start coming in on the test of 25652 to 25898. They are going to try to form a secondary lower top. This is the standard move following a steep sell-off. The first leg up is short-covering, sellers re-emerge and the market heads lower. We’ll be looking for this chart pattern.

Taking out the upper level of the range at 25898 will indicate the buying is getting stronger.

Daily Technical Forecast

Based on the late session price action, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the 50% level at 25652.

Bullish Scenario

Taking out 25652 and sustaining the rally late in the session will indicate the buying is getting stronger. This could lead to a test of a downtrending Gann angle at 25670. This is a potential trigger point for an acceleration to the upside with the next target the Fibonacci level at 25898.

Bearish Scenario

A sustained move under 25652 late in the session will signal the presence of sellers. Turning lower for the session will indicate the selling is getting stronger. This could trigger a pullback into a steep uptrending Gann angle at 25378.

If 25378 fails then the first-leg or short-covering rally has probably run its course and the Dow will start retreating.

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