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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 27072 to Sustain Momentum

James Hyerczyk

June E-mini Dow Jones Industrial Average futures contract is expected to open higher based on the pre-market trade. The cash market is up about 216, or 0.08% as we write. Last week, the blue chip average soared 6.8% on optimism over the economy reopening. Nearly half of those gains were fueled by a jump on Friday, which was fueled by a surprisingly strong May U.S. Non-Farm Payrolls report.

At 12:58 GMT, June E-mini Dow Jones Industrial Average futures are trading 27301, up 229 or +0.85%.

In other news, OPEC and its allies agreed to extend their historic production cut over the weekend. The move boosted oil prices and energy stocks in the premarket Monday. Dow Jones stocks, Chevron and ExxonMobil could advance on the news.

Despite the growing optimism over the economy’s recovery, the Dow could face some light headwinds ahead of Wednesday’s Federal Reserve statement on interest and a press conference from Chairman Jerome Powell. The Fed is expected to reiterate its commitment to unlimited asset purchases to keep markets functioning.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Friday’s high. The uptrend is safe for now, but the prolonged move up in terms of price and time has put the Dow in a position to post a potentially bearish closing price reversal top. This won’t change the main trend to down, but it could trigger a 2 to 3 day correction designed to alleviate some of the upside pressure.

The minor trend is also up. A trade through 24991 will change the minor trend to down. This will also shift momentum to the downside.

The major support is the retracement zone at 25144 to 23796.

The minor range is 24991 to 27351. Its retracement zone target is 26171.

Daily Swing Chart Technical Forecast

Given the prolonged move up in terms of price and time, the direction of the June E-mini Dow Jones Industrial Average the rest of the session on Monday is likely to be determined by trader reaction to 27072.

Bullish Scenario

A sustained move over 27072 will indicate the presence of buyers. If this continues to generate enough upside momentum then look for the rally to continue to extend over the near-term into the December 31, 2019 close at 28476.

Bearish Scenario

A sustained move under 27072 will signal the presence of sellers. This will also put the Dow in a position to form a closing price reversal top on the daily chart. If confirmed, this could lead to a 2 to 3 day correction, but not necessarily a change in the trend. If the move creates enough downside momentum then look for the selling to eventually extend into the main Fibonacci level at 25144.

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

This article was originally posted on FX Empire