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E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 2880.50 Will Set Tone into Close

James Hyerczyk

June E-mini S&P 500 Index futures are trading slightly lower at the mid-session on Friday. The market rebounded from earlier losses after the removal of some U.S. tariffs offset continued concerns over U.S.-China trade relations. The market extended its gains in response to a jump in U.S. consumer sentiment.

Stocks recovered from earlier weakness after CNBC reported the U.S. is poised to lift tariffs on steel and aluminum imports. The index was also boosted after the Trump administration announced it would delay slapping tariffs on foreign-made cars by six months.

At 17:28 GMT, June E-mini S&P 500 Index futures are trading 2877.50, down 1.50 or -0.07%.

Daily June E-mini S&P 500 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on May 14 at 2799.75.

A trade through 2799.75 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a move through 2961.25.

The main range is 2726.50 to 2961.25. Its retracement zone at 2843.75 to 2816.00 is potential support. Traders took out this zone earlier in the week with little follow-through. Prices accelerated to the upside on Thursday when buyers regained the upper or 50% level at 2843.75.

The short-term range is 2961.25 to 2799.75. Its retracement zone at 2880.50 to 2899.50 is acting like resistance. It is currently being tested. This zone is important to the near-term structure of the index.

Since the main trend is down, sellers are likely trying to form a secondary lower top. Meanwhile, aggressive counter-trend buyers are trying to take out this zone.

Daily June E-mini S&P 500 Index (Short-Term)

Daily Technical Forecast

Based on the earlier price action and the current price at 2877.50, the direction of the June E-mini S&P 500 Index into the close is likely to be determined by trader reaction to the 50% level at 2880.50.

Bullish Scenario

A sustained move over 2880.50 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into yesterday’s high at 2894.00, followed by a Fibonacci level at 2899.50. Taking out this level will likely lead to a rally into the downtrending Gann angle at 2913.25.

Bearish Scenario

A sustained move under 2880.50 will signal the presence of sellers. This will also indicate that sellers are respecting the short-term retracement zone at 2880.50 to 2899.50.

Crossing to the weak side of the downtrending Gann angle at 2865.25 will indicate the selling pressure is getting stronger. This could lead to a test of the main 50% level at 2843.75. This is a potential trigger point for a break into an uptrending Gann angle at 2824.50, followed by the main Fibonacci level at 2816.00.

This article was originally posted on FX Empire