E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Turns Higher on ADP Report Miss

June E-mini Dow Jones Industrial Average futures are trading higher late in the session on Thursday, erasing an early loss. Volume is light and the price action choppy ahead of a key jobs report due on Friday.

The blue chip average was pressured early after Microsoft cut its fourth-quarter forecast for profit and revenue, making it the latest U.S. company to warn of a hit from a stronger U.S. Dollar. Shares have since recovered from the earlier sell-off and are now up about 0.1%.

At 18:52 GMT, June E-mini Dow Jones Industrial Average futures are at 33078, up 280 or +0.85%. The SPDR Dow Jones Industrial Average ETF (DIA) is trading $331.38, up $3.02 or +0.92%.

In economic news, U.S. private payrolls increased far less than expected in May, suggesting demand for labor was starting to slow amid higher interest rates and tightening financial conditions, the ADP National Employment report showed.

Rates fell as traders took the ADP report to mean the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy. The drop in rates was also supportive for stocks.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 33434 will signal a resumption of the uptrend. A move through 30585 will change the main trend to down.

The main range is 36708 to 30585. Its retracement zone at 33647 to 34369 is the next major upside target and possible resistance.

The short-term range is 30585 to 33434. Its retracement zone at 32010 to 31673 is the key support area.

The minor range is 33434 to 32491. The E-mini Dow is currently straddling its pivot at 32963.

Daily Swing Chart Technical Analysis

Trader reaction to 32963 will likely determine the direction of the June E-mini Dow Jones futures contract into the close on Thursday and early Friday.

Bullish Scenario

A sustained move over 32963 will signal the presence of buyers. If this creates enough upside momentum then look for a retest of the main top at 33434. Overtaking this will reaffirm the uptrend with the main 50% level at 33647 the next likely target.

Bearish Scenario

A sustained move under 32963 will indicate the presence of sellers. This move could generate the momentum needed to challenge the intraday low at 32491. If it fails then look for the selling to possibly extend into the short-term retracement zone at 32010 to 31673.