The Nasdaq100 Futures (CME: NQ) are on track for their first weekly gain following a four-week losing streak, with a notable 3.40% increase week-to-date.
Following a downturn last week, U.S. stocks have rebounded, driven by improved investor sentiment amid easing tensions in the Middle East. Additionally, positive earnings reports from mega-cap tech companies have contributed to the upward momentum in the Nasdaq100 Futures, as investors respond favourably to the strong performance of these underlying assets.
Today, traders eagerly await the release of the Personal Consumption Expenditures (PCE) index for March, which serves as the Federal Reserve’s preferred inflation gauge. Recent data, including the United States GDP Price Index, which exceeded expectations at 3.1%, suggests a potential uptick in inflationary pressures. The upcoming PCE Price Index reading holds significance as traders assess its implications for monetary policy decisions.
Technical
The Nasdaq100 Futures are currently experiencing a downtrend, trading below the 100-day moving average. However, there are signs of buyer interest entering the market, which is evident in the breakout above a descending channel pattern that previously defined the downtrend.
Following this breakout, a support level emerged at 17308.25, providing a base for the index futures to move higher. While resistance at 18350.75 remains distant, the 100-day moving average could attract buyers if momentum persists. A breakthrough above this moving average on high volumes could indicate intensified buying pressures, potentially leading to a retest of the 18350.75 resistance level. Conversely, if bearish pressures resurge, the 17308.25 support level may serve as a downside target. Traders are closely monitoring these technical levels, assessing market sentiment and momentum shifts.
Summary
As the Nasdaq100 Futures mark their first weekly gain in four weeks, investors eye the PCE Price Index for insight into inflation’s impact on Fed rate decisions. While trading below the 100-day moving average, a convergence with this indicator is likely. Resistance at 18350.75 remains pivotal amidst market sentiment scrutiny.
Sources: U.S. Bureau of Economic Analysis, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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