E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Traders Trying to Establish Support after Early Rally Fails

June E-mini Dow Jones Industrial Average futures are edging lower shortly after the opening. Earlier in the session the market rallied on optimism over the resumption of trade negotiations between the United States and China. However, fears of a slowdown in the U.S. economy may have limited gains. In economic news, the U.S. economy grew by 2.2 percent in the fourth quarter, according to the government’s final read released Thursday. This was less than the forecast. Traders showed little reaction to the news.

At 15:29 GMT, June E-mini Dow Jones Industrial Average futures are trading 25604, down 56 or -0.22%.

 

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of a closing price reversal bottom on March 25 at 25377. A trade through 25246 will signal a resumption of the downtrend. The main trend will change to up on a move through 26145.

The minor trend is also down. A trade through 25822 will change the minor trend to up. This will reaffirm the shift in momentum to the upside. Minor bottoms come in at 25441 and 25377.

The choppy trade is being fueled by a pair of retracement zones.

The main range is 25246 to 26145. The market is currently straddling its retracement zone at 25696 to 25589.

The short-term range is 26145 to 25377. Its retracement zone at 25761 to 25852 stopped the rally on Tuesday, Wednesday and earlier today.

Daily Technical Forecast

Based on the early price action and the current price at 25604, the direction of the June E-mini Dow Jones Industrial Average the rest of the session is likely to be determined by trader reaction to the Fibonacci level at 25589.

Bullish Scenario

A sustained move over 25589 will indicate that buyers are coming in to support the market. If this move generates enough upside momentum then look for a rally into a cluster of numbers at 25694, 25696 and 25697.

We could see selling pressure on a test of 25694 to 25697. Overtaking 25697, however, is likely to drive the market into a 50% level at 25761. This is the trigger point for a surge into the minor top at 25822 and the Fibonacci level at 25852.

Bearish Scenario

A sustained move under 25589 will signal the selling is getting stronger. This could trigger an acceleration into the uptrending Gann angle at 25470. This is followed by the minor bottoms at 25441 and 25377.

Additional Gann angle support comes in at 25358 and 25302. The latter is the last potential support angle before the 25246 main bottom.