September E-mini S&P 500 Index futures are expected to open lower based on the pre-market trade. Lingering concerns over the deteriorating trade relations between the United States and its trading partners, China and the European Union, continue to weigh on prices. Investors are also reacting to U.S. GDP data that came in below expectations.
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 2679.25 will change the main trend is down.
The index is also down 11 sessions from the last main top at 2796.00 so it is in the window of time for a potential closing price reversal bottom.
The price action is also being influenced by a series of retracement levels.
The main range is 2595.75 to 2796.00. Its retracement zone at 2695.75 to 2672.25 is the primary downside target. The index is currently testing the upper or 50% level of this range at 2795.75.
On the upside, potential resistance levels are lined up at 2714.00, 2724.00, 2737.75 and 2755.25.
Daily swing Chart Technical Forecast
Based on the early trade, the direction of the index is likely to be determined by trader reaction to the 50% level at 2695.75.
A sustained move over 2695.75 will indicate the presence of buyers. If this move generates enough upside momentum then look for a retest of 2714.00. Overtaking 2717.25 will produce a new high for the session with the next target 2724.00. The rally could pick up some steam on a move over this level with 2737.75 the next target.
A sustained move under 2695.75 will indicate the presence of sellers. This could trigger an acceleration to the downside with targets coming in at 2679.25 and 2672.25. We could see a technical bounce on a test of these levels if buyers show up to defend the trend.
Taking out 2672.25 will put the index in an extremely weak position. This could trigger an acceleration to the downside with 2595.75 the next potential downside target.
Watch the price action and read the order flow at 2695.75 all session.