E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Weekly Chart Strengthens Over 25914, Weakens Under 25668

September E-mini Dow Jones Industrial Average futures closed higher last week, following through to the upside after confirming the previous week’s closing price reversal bottom. The market was underpinned by expectations of an interest rate cut by the Federal Reserve this year.

The Fed begins a two-day meeting on Tuesday and on Wednesday is expected to leave interest rates unchanged, however, in its monetary policy statement, it is expected to remove the word “patient”, indicating it is likely to raise rates as early as July.

Last week, September E-mini Dow Jones Industrial Average futures settled at 26128, up 121 or +0.46%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum shifted to the upside last week with the confirmation of the weekly closing price reversal bottom at 24626. A trade through 26710 will change the main trend to up. This could lead to a test of the October 3, 2018 main top at 27031.

A trade through 24626 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The short-term range is 26710 to 24626. Trading on the strong side of its retracement zone at 25914 to 25668 is helping to generate an upside bias. This zone is new support.

Weekly Technical Forecast

Based on last week’s price action and the close at 26128, the direction of the September E-mini Dow Jones Industrial Average this week is likely to be determined by trader reaction to the downtrending Gann angle at 26198.

Bullish Scenario

A sustained move over 26198 will indicate the presence of buyers. If this move can create enough upside momentum then look for a rally into the next downtrending Gann angle at 26454, followed by another downtrending Gann angle at 26582. The latter is the last potential resistance angle before the 26710 main top.

Bearish Scenario

A sustained move under 26198 will signal the presence of sellers. The first target is the short-term Fibonacci level at 25914. Look for a technical bounce on the first test of this level. If it fails then look for the selling to possibly extend into a support cluster at 25668 to 25650. The latter is the trigger point for an acceleration to the downside with the next target angle coming in at 25138.

The major support is a pair of uptrending Gann angles at 24936 and 24882.

Overview

The key area to watch is 25914 to 25668 because if it fails, a secondary lower top could form. Look for the upside bias to continue on a sustained move over 25914 and for a downside bias to develop on a sustained move under 25668.