E-mini S&P 500 Index (ES) Futures Technical Analysis – Set Up for Rally into 3431.25 – 3465.50

December E-mini S&P 500 Index futures are trading higher shortly before the cash market opening as investors hoped for a pledge by the Federal Reserve to keep interest rates low for a prolonged period, with upbeat quarterly results from FedEx also boosting sentiment.

The Federal Open Market Committee will release its policy statement and economic projections at 18:99 GMT, followed by Fed Chair Jerome Powell’s virtual news briefing 30 minutes later.

At 12:45 GMT, December E-mini S&P 500 Index futures are trading 3408.00, up 13.00 or +0.38%.

The Fed’s two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, the momentum is trending higher. A trade through 3286.00 will signal a resumption of the downtrend. The main trend will change to up on a move through 3576.25.

The minor trend is up. It changed to up on Tuesday when buyers took out 3414.00. This move shifted momentum to the upside.

The short-term range is 3576.25 to 3286.00. Its retracement zone at 3431.25 to 3465.50 is the primary upside target.

The new minor range is 3286.00 to 3418.25. Its retracement zone at 3352.00 to 3336.50 is the nearest downside target. It’s a dynamic zone. It will move up as the index moves higher.

Daily Swing Chart Technical Forecast

If the early upside momentum continues, then look for the rally to possibly extend into the retracement zone at 3431.25 to 3465.50.

Since the main trend is down, sellers are likely to come in following a test of this retracement zone. They are going to try to form a secondary lower top, which could lead to a pullback into 3352.00 to 336.50.

Taking out 3465.50 could trigger an acceleration to the downside.

If the Fed doesn’t deliver what investors want to hear then we could see a near-term pullback into the minor retracement zone at 3352.00 to 3336.50. Counter-trend buyers could come in on a test of this zone in an effort to form a potentially bullish secondary higher bottom.

For a look at all of today’s economic events, check out our economic calendar.