The Nasdaq 100 Index Futures (CME: NQ) opened the Wednesday trading session lower to add to the 1.31% decline achieved in the previous session as the US debt default fears continue to weigh on the US equities. The US debt ceiling stalemate has negatively impacted the market’s appetite for riskier assets, helping the Nasdaq futures tumble over 1% from the turn of the week price level of 13805.50. 

Elevated bets on a potential tighter-for-longer monetary path from the Fed following a series of hawkish remarks from several Fed officials are also significantly weighing on investor sentiment in the near term. The market is now positioning itself for another turbulent trading session, with the Fed official Waller’s speech acting as an opening act before the FOMC meeting minutes, due later today. 

Technical 

The 4H chart shows that the index futures recently broke through the weekly pivot point at 13701.25 and are now settling around the 23.60% Fibonacci retracement level in anticipation of the upcoming economic indicators from the US. Should the economic indicators come out hawkish with the US debt ceiling fears still lingering, the index futures could continue their slide with the market firmly keeping an eye on the reaction of the price action around the dynamic support. A sustained break below the support would bring the 13632.00 support level into play. The fall of the 13632.00 support level could trigger a selloff sending the index futures towards the next support level at 13478.25. 

However, should the economic data be as dovish as the Fed’s Chair remarks last Friday, the bulls could look to push the price higher, with investors firmly focusing on the reaction of the price action around the 13796.25 psychological level. A break through the level would boost the bulls’ attempt to retest the 13979.00 resistance level. A break above the 13979.00 level would trigger a run towards the next resistance level (R1) at 14084.25. 

Summary 

The US debt ceiling fears have helped the index futures pullback more than 2% from the index’s 13-month high, and now the market’s focus shifts to the Fed official Waller’s speech and the FOMC meeting minutes due today for a directive on the movement of the index futures in the short term. 

Sources: TradingView, Reuters, CNBC. 

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