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E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Hold 3035.50 to Sustain Upside Momentum

James Hyerczyk

June E-mini S&P 500 Index futures are nudging higher for a third session shortly after the cash market opening on Thursday. The early buying is also coming across as tentative for a second session. Yesterday, the benchmark index spent most of the session lower before screaming to the upside into the close.

At 14:09 GMT, June E-mini S&P 500 Index futures are trading 3041.75, up 6.25 or +0.24%.

The index is up about 2.7% during this holiday shortened week with most of the gains driven by optimism about the reopening of the U.S. economy and positive steps toward the development of a vaccine to halt the spread of coronavirus.

Gains are being held in check, however, after China’s National People’s Congress approved a national security bill for Hong Kong. President Trump said he would announce the U.S. response to the move before the end of the week.

In economic news, the Labor Department said Thursday another 2.1 million Americans filed for unemployment benefits last week. That was higher than the 2.05 million forecast. Continuing claims, which is a better indication of the unemployment picture, plunged by nearly 4 million.

With the economy reopening at a steady pace, buyers are looking at bank stocks such as JPMorgan Chase, Citigroup and Wells Fargo to outperform. Meanwhile shares of companies that rose during the worse of the pandemic like Zoom Video, Shopify and Amazon are feeling some pressure.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through yesterday’s high signaled a resumption of the uptrend. A trade through 2903.75 will change the main trend to down.

The main range is 3397.75 to 2174.00. Its retracement zone at 2930.25 to 2785.75 is controlling the longer-term direction of the index. Its Fibonacci level at 2930.25 is the nearest support.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index the rest of the session on Thursday is likely to be determined by trader reaction to yesterday’s close at 3035.50.

Bullish Scenario

A sustained move over 3035.50 will indicate the presence of buyers. If this continues to generate enough upside momentum then the index will remain on pace to challenge its next objective at 3131.00.

Bearish Scenario

A sustained move under 3035.50 will signal the presence of sellers. This will put the index in a position to form a potentially bearish closing price reversal top. If confirmed, this could lead to 2-3 day counter-trend selling with 2930.25 the first objective.

This article was originally posted on FX Empire

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