September E-mini Dow Jones Industrial Average futures are trading lower shortly after the cash market opening, partially pressured by weakness in components 3M Co and McDonald’s Corp. A firmer trade in another component, Pfizer, is helping to ease some of the selling pressure.
The early trade is choppy as investors await a key monetary policy decision by the U.S. Federal Reserve on Wednesday. Investors are also monitoring the discussion on new fiscal stimulus in Congress with the hopes of a deal by Friday.
At 14:57 GMT, September E-mini Dow Jones Industrial Average futures are trading 26301, down 183 or -0.69%.
Shortly before the opening, 3M Company reported it fell short of estimates on quarterly profit and revenue, hurt by a plunge in demand across its business units.
McDonald’s Corp fell 2.1% after posting a bigger-than-expected drop in global same-store sales and missing profit expectations as its restaurants were shut due to the pandemic.
Pfizer Inc rose 3.1% after it raised its full-year forecast on strong demand for cancer drug and blood thinner. Late on Monday, the drug maker announced a pivotal global study to evaluate a COVID-19 vaccine candidate.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 26232 will signal a resumption of the downtrend. The main trend will change to up on a move through 27057 and 27063.
The minor trend is also down. A trade through the new minor bottom at 26232 will indicate the selling pressure is getting stronger.
The minor range is 27057 to 26232. Its retracement zone at 26645 to 26742 is resistance.
On the downside, the nearest retracement level support comes in at 26298 and 26178.
Taking out 26178 could trigger an acceleration to the downside with 25938 the next major target.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to the Fibonacci level at 26298.
A sustained move under 26298 will indicate the presence of sellers. This could trigger a quick break into 26232 and 26176.
If 26176 is taken out with conviction then look for the selling to possibly extend into the main 50% level at 25938.
A sustained move over 26298 will indicate that buyers are coming in to defend against a steep sell-off. If this creates enough upside momentum then look for the rally to possibly extend into 26645 to 26742. I don’t think we can think about the long side unless we get a close over 26742.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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