The Nasdaq100 Futures (CME: NQ) have recently faced a mixed trajectory, marked by both gains and losses. Despite recording its fifth week of losses for the year, the futures remain on an upward trend for five consecutive months, illustrating resilience amidst market fluctuations.
The index futures initially rallied in response to the PCE Price Index meeting expectations at 2.5%, indicating stable inflation levels. However, this optimism was short-lived as upbeat U.S. manufacturing data triggered risk-off sentiment, recalibrating expectations of a rate cut in June.
With the probability dropping from 63.8% to 56.8%, investors anticipate persistent price pressures amidst improving employment figures in the manufacturing sector, a major sector in the U.S. economy. As the week unfolds, market participants eagerly await key events, particularly the U.S. labour market reports, notably the Nonfarm Payrolls data, which could provide further insights into the economic landscape and influence Nasdaq100 Futures‘ trajectory.
Technical
The recent price action of the Nasdaq100 Futures indicates a shift in sentiment favouring the downside, with the futures crossing below the critical 100-day moving average.
Initially finding support at the 18053.25 level, the futures faced resistance at 18707.50, where overbought RSI conditions emerged, curbing further upside potential. Subsequently, a downturn ensued, with the futures declining and aligning with the 100-day moving average, signalling a short-term downtrend.
In the current session, the futures broke below the 50% Fibonacci Retracement level, suggesting continued downside pressures. If this trend persists, the 61.80% Golden Ratio may serve as a significant point of interest to the downside. Conversely, a resurgence of upside momentum could lead to a retest of the 18707.50 resistance level.
Summary
Amidst mixed performance, the Nasdaq100 Futures face downward pressure following robust U.S. data. Technical indicators suggest a short-term downtrend, with support at 18053.25 and resistance at 18707.50. Traders keenly await U.S. labour market reports to gauge future market direction amid evolving economic conditions.
Sources: CME, Reuters, TradingView
Piece Written By Nkosilathi Dube, 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
