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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 33631 Sets the Tone

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June E-mini Dow Jones Industrial Average futures are trading lower following the release of the U.S. consumer inflation report and on a steep loss in shares of Johnson & Johnson after the Food and Drug Administration (FDA) asked states on Tuesday to temporarily halt using Johnson & Johnson’s COVID-19 vaccine “out of an abundance of caution” after six women in the U.S. developed a rare blood-clotting disorder.

At 12:36 GMT, June E-mini Dow Jones Industrial Average futures are trading 33553, down 78 or -0.23%.

The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year-over-year gain is the highest since August 2018.

The index was projected to rise 0.5% on a monthly basis and 2.5% from March 2020, according to Dow Jones estimates.

Daily June E-mini Dow Jones Industrial Average
Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, may be getting ready to shift to the downside. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high.

A trade through 31951 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the market is inside the window of time for a potentially bearish closing price reversal top.

This chart pattern won’t change the main trend to down, but if confirmed, it could fuel the start of a 2 to 3 day correction.

The minor range is 33157 to 33712. Its 50% level at 33435 is potential support.

The short-term range is 31951 to 33712. If the closing price reversal top is confirmed then its 50% to 61.8% retracement zone at 32832 to 32624 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average futures contract on Tuesday is likely to be determined by trader reaction to 33631.

Bullish Scenario

A sustained move over 33631 will indicate the presence of buyers. The first upside target is the intraday high at 33712. Taking out this level could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 33631 will signal the presence of sellers. The first downside target is the minor pivot at 33435.

Buyers could come in on the first test of 33435, but if it fails then look for the selling to possibly extend into the minor bottom at 33157.

Side Notes

A close under 33631 will form a closing price reversal top on the daily chart. If confirmed on Wednesday, this could trigger the start of a 2 to 3 day correction with 32832 to 32624 a potential downside target.

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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