June E-mini Dow Jones Industrial Average futures are extending their rebound on Wednesday and U.S. Treasury yields held below recent peaks ahead of U.S. consumer inflation data that will offer a guide to how aggressively the Federal Reserve will raise rates. Some investors believe the data could show inflationary pressures in the world’s biggest economy are peaking.
At 11:39 GMT, June E-mini Dow Jones Industrial Average futures are trading 32378, up 291 or +0.91%. On Tuesday, the SPDR Dow Jones Industrial Average ETF (DIA) settled at $321.78, down $0.82 or -0.25%.
Traders are looking for the U.S. Consumer Price Index (CPI) to show an annual increase of 8.1%, 0.4 percentage points lower than the prior 8.5%, which was the hottest reading since December 1981.
The CPI report is pivotal because if inflation continues to print higher and higher the market will continue to sell off as this will increase the odds the Federal Reserve will adhere to a plan to raise rates at least 50 basis points in June and July, followed by a series of 25 basis point rate hikes at every meeting until at least the end of the year.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 31805 will signal a resumption of the downtrend. A move through 34027 will change the main trend to up.
The minor range is 34027 to 31805. Its retracement zone at 32916 to 33178 is the first upside target.
The short-term range is 35413 to 31805. Its retracement zone at 33609 to 34035 is the next resistance target.
Daily Swing Chart Technical Forecast
The direction of the June E-mini Dow Jones Industrial Average on Wednesday will be determined by trader reaction to 32234.
A sustained move over 32234 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the 50% level at 32916.
Look for sellers on the first test of 32916, but overtaking it could extend the rally into the Fibonacci level at 33178. This is a potential trigger point for an acceleration into the short-term 50% level at 33609.
A sustained move under 32234 will signal the presence of sellers. This could lead to a retest of this week’s low at 31805. If this price fails then look for the selling to possibly extend into the March 25, 2021 main bottom at 31539.