E-mini S&P 500 Index (ES) Futures Technical Analysis – July 20, 2017 Forecast

September E-mini S&P 500 Index futures are called slightly higher shortly before the cash market opening. There is no resistance and the current rally is being driven by momentum.

The momentum has been provided by diminishing odds of a third Fed rate hike later this year. Fed Chair Janet Yellen’s comments about muted inflation being an issue and last week’s weaker-than-expected Consumer Inflation and Retail Sales reports also green-lit the current rally.

Today’s European Central Bank interest rate decision, monetary policy statement and comments from ECB President Mario Draghi could actually influence the S&P futures contract today.

Investors are currently focusing on earnings and the Fed. However, once they determine whether the ECB and Draghi are hawkish or dovish, we could see the return of volatility. The ECB has to be particularly cautious about how it delivers its message because if it comes on too strong, too early, stocks will break.

If stocks continue to rally then this will mean that investors aren’t too worried about the pace of the ECB’s tightening process.

Nonetheless, without any technical resistance, all we can do is trade the trend and wait for a topping signal like a closing price reversal top.