The Nasdaq 100 futures (CME: NQ) are in a consolidation phase following a robust 2% surge earlier in the week. Anticipation looms as US equity futures eagerly await the forthcoming CPI report, a pivotal moment slated for tomorrow.
Analysts project a rise in year-over-year inflation to 3.2%, while core inflation is expected to ease from 4% to 3.8%. The market braces for the potential impact of this data release, as it could significantly shape expectations regarding the timing of the Federal Reserve’s inaugural round of rate adjustments this year. These developments might usher in distinct directional movements in the market during the final sessions of the week.
Technical
On the 4H chart, a recent downtrend has been broken, and a retracement has been initiated. The recent uptick has pushed the futures above the 25-SMA (green line) and the 50-SMA (blue line), signalling a bullish shift in the current momentum. However, the 100-SMA (orange line) aligns with the 61.8% Fibonacci golden ratio, creating a stern resistance at 16,849.50.
If this resistance withholds the current buying pressure, the futures could slip back to the Fibonacci midpoint, where the 50-SMA provides support at 16,751.75. Should a breakdown occur at this level, the futures could take back some of its recent gains, bringing lower support at 16,630.75 and 16,602.14, the 25-SMA, into play.
However, a breakout above the 100-SMA resistance could signal a longer-term bullish reversal. Resistance at 16,957.25 and 17,072.75 could then become levels of interest to traders in the upcoming sessions if the inflation data supports the view that rate cuts could occur in the opening months of the year.
Summary
After a recent bullish run, the Nasdaq 100 is consolidating ahead of tomorrow’s CPI report. Strong resistance is established at 16,849.50, which could result in low trading ranges in the upcoming session until the latest data becomes available.
Sources: Koyfin, Tradingview
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
