E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Hold 3687.00 to Sustain Upside Momentum

March E-mini S&P 500 Index futures are edging higher at the cash market opening on Wednesday, tracking further progress toward a bumper coronavirus stimulus package, while investors hoped for an affirmation of continued easy monetary policy from the Federal Reserve’s last meeting for the year.

At 14:30 GMT, March E-mini S&P 500 Index futures are trading 3689.75, up 2.75 or +0.07%.

U.S. congressional leaders reported substantial progress toward a spending bill late on Tuesday, bolstering hopes of increased liquidity to offset the COVID-19 pandemic’s economic impact.

The Fed is also expected to keep lending rates at near-zero and signal their staying there for the foreseeable future at the conclusion of a two-day meeting later on Wednesday. Markets are anticipating an update on the Fed’s bond-buying program.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3707.00 will signal a resumption of the uptrend. A move through 3620.75 will change the main trend to down.

The market is also trading on the strong side of four 50% retracement levels, giving it a solid upside bias. These levels are potential support at 3663.75, 3645.25, 3620.50 and 3602.00.

Daily Swing Chart Technical Forecast

The main trend is up, but the upside momentum is not that strong. Remember that 3707.00 is not only the all-time high, but it’s also a closing price reversal top, which could mean that sellers overtook buyers at that price on December 9.

The good thing is the mix of low interest rates and increased liquidity has brightened the outlook for equities this year, so another dose of fiscal stimulus along with a dovish Fed could be just the formula to drive prices sharply higher over 3707.00.

On the downside, the most important price level to watch is 3687.00. A close under this level would be a sign of weakness and set up the possibility of a potentially bearish double-top.