The Nasdaq100 Futures (CME: NQ) have surged 11% year-to-date, establishing a fresh all-time high. This impressive rally is driven by growing expectations of a rate cut this year, spurred by a slight downtick in the inflation rate.
The weaker labour market, reflected in higher-than-anticipated jobless claims in recent weeks, further supports these expectations. A rate cut by the Fed is often seen as a way to stimulate economic activity, and investors are betting on this possibility, driving the Nasdaq100 Futures to record highs.
Adding to the positive sentiment, Nvidia’s stellar quarterly results and sales forecasts have significantly boosted market confidence. Traders are keenly watching today’s U.S. jobless claims and PMI data, which could provide crucial insights into the health of the U.S. economy. These data points are pivotal, as they might influence the future trajectory of the index futures.
Technical
The Nasdaq100 Futures are trading in a robust uptrend, consistently exceeding the 100-day moving average. An ascending channel pattern further validates this upward trajectory, reflecting strong bullish momentum. Support recently materialized at the 18165.50 level, aligning with the channel’s lower boundary, which provided a solid base for the index futures.
The subsequent rally propelled the index futures past the previous all-time high of 18707.50, a key resistance level. This breakout led to the formation of a new all-time high of 18970.50. Should the current upside momentum persist, the next point of interest could be the 19000 level, a significant psychological milestone just below the 23.60% Fibonacci Extension level. Conversely, if downside momentum resurfaces, traders will likely focus on the 100-day moving average as a critical support level.
Summary
The Nasdaq100 Futures‘ 11% year-to-date surge, driven by rate cut expectations and Nvidia’s strong performance, highlights robust market sentiment. The uptrend remains solid, with support at 18165.50 and potential gains targeting 19000.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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