The Nasdaq 100 Index Futures (CME: NQ) are on course for the sixth consecutive week of gains as the market digests the US debt ceiling triumph and the nonfarm payrolls (NFP) data, which showed positive jobs growth for the 29th consecutive month. The May report showed that the nonfarm payrolls’ employment grew by 339 000 from the 294 00 added in April and against the market’s expectations of 190 000 increase.

The jobs data growth boosted the potential for a tighter monetary policy path from the Federal Reserve, slightly boosting the greenback initially. However, the unemployment data painted a different picture, with the higher-than-expected growth after the unemployment rate grew to 3.7% against the expected 3.5%, suggesting that the Fed might be winning its’ fight to increase the economy’s unemployment rate.

Technical

The 4H chart shows that the index futures are currently trending higher following a breakout, retest and rejection of the ascending channel. The technicals show that the market is firmly bullish on the index futures, with the price action trading above both the daily pivot point and the 50-day moving average (50-EMA). Therefore, the bulls could keep a keen eye on the R2 significant level at 14696.25 for confirmation of bullish momentum. A sustained breakthrough above the 14696.25 price level would bring the 14864.25 (R3) and 15032.25 (R4) resistance levels into play.

For a bear case, the bears could look for a break below the daily pivot point to target the channel’s resistance for a potential pullback back into the channel. A sustained break within the channel would trigger a run towards the channel’s support, with the 14247.25 and 13961.00 price levels acting as levels of significance for the bears.

Summary

The market has seemingly welcomed the NFP data and the unemployment data by rewarding index futures with gains during the session. With a Fed pause chatter gaining steam, the index futures bulls could look to push the price action, with the 14864.25 and 15032.25 levels likely targets for the bulls. However, the NFP data could suggest that traders should also keep a potential pullback in play as the market digests the reports.

Sources: TradingView, Reuters, Barchart.

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