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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trying to Build Support Base on Key Fib Level

James Hyerczyk

September E-mini Dow Jones Industrial Average futures are putting in a mixed performance at the mid-session on Thursday as investors continue to assess the impact of a surge in U.S. coronavirus cases on the country’s attempt to reopen the economy.

While renewed worries over a second-wave of COVID-19 cases may be capping stock market gains, helping to underpin prices are a regulation rollback for the big banks.

At 17:14 GMT, September E-mini Dow Jones Industrial Average futures are trading 25357, down 36 or -0.14%.

While some investors remain optimistic that the re-opening of the economy will eventually return life to normal, others are getting caught up in a slew of distractions including increasing numbers of COVID-19 cases, trade protectionism and politics.

While these factors may be fueling investor uncertainty, some on Wall Street received a dose of clarity on Thursday after U.S. regulators said they would ease restrictions on banks that were implemented following the financial crisis.

Bank stocks rallied on the news including Dow components JPMorgan Chase, which rose over 2% and Goldman Sachs which jumped 3.1%.

Daily September E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 22640 will change the main trend to down. A move through 27466 will signal a resumption of the uptrend.

The minor trend is down according. This is controlling the momentum. A trade through 26294 will change the main trend to up. This will also shift momentum to the upside. Meanwhile, a trade through the minor bottom at 24409 will indicate the selling pressure is getting stronger.

The minor range is 27466 to 24409. Its 50% level at 25938 is resistance.

On the downside, the major support is a retracement zone at 25107 to 23760. This zone is also controlling the longer-term direction of the Dow.

The short-term range is 22640 to 27466. Its retracement zone at 25053 to 24484 is another potential support zone. This area falls inside the major retracement zone.

Short-Term Outlook

Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average futures contract into the close is likely to be determined by trader reaction to the Fibonacci level at 25107.

Bullish Scenario

A sustained move over 25107 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible test of the pivot at 25938.

Bearish Scenario

A sustained move under 25107 will signal the presence of sellers. This could trigger a sharp break into a Fibonacci level at 24484, followed closely by a minor bottom at 24409.

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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