E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 35747 Sets the Tone

December E-mini Dow Jones Industrial Average futures are trading flat early Friday as traders await the release of the November U.S. Consumer Inflation report at 13:30 GMT.

The blue chip average closed lower on Thursday as investors banked some profits after three days of gains and turned their focus toward upcoming inflation data and how it might influence the Federal Reserve’s meeting next week.

At 05:30 GMT, December E-mini Dow Jones Industrial Average futures are at 35729, down 24 or -0.07%.

Investors are playing the waiting game ahead of the U.S. Consumer Price Index (CPI). A higher-than-expected reading would strengthen the case for a policy tightening decision at the U.S. central bank’s meeting.

Economists surveyed by Dow Jones expect a 0.7% gain for the month of November, which would translate to a year-over-year growth rate of 6.7%. If that is the case, it will mark the biggest move since June 1982.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 36238 will change the main trend to down. A move through 33928 will signal a resumption of the downtrend.

Today is the seventh day up from the last main bottom, which puts the E-Mini Dow inside the window of time for a potentially bearish closing price reversal top.

The minor trend is up. This is controlling the momentum. Trades through 35926 and 35988 will indicate the momentum is getting stronger.

The nearest support is a short-term Fibonacci level at 35484, followed by a short-term 50% level.

The main range is 33383 to 36446. Its retracement zone at 34915 to 34641 is another potential support zone.

The longer-term retracement zone support comes in at 34641 to 34214.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average futures contract on Friday is likely to be determined by trader reaction to 35747.

Bullish Scenario

A sustained move over 35747 will indicate the presence of buyers. If this move creates enough upside momentum then look for a rally into 35926. Taking out this level will indicate the buying is getting stronger with 35988 the next likely target.

The minor top is a potential trigger point for an acceleration to the upside with 36238 the next likely target. Taking out this level will change the main trend to up.

Bearish Scenario

A sustained move under 35746 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 35484. If this level fails to hold then look for the selling to possibly extend into 35187.