The Nasdaq 100 Index Futures (CME: NQ) seem to have weathered the turbulent start to the week and look to continue their recent rally, which has seen the index futures close trading on the green for four consecutive trading sessions. The higher yields and the US dollar weighed down the equity markets during the Monday morning trading.
The higher yields and the US dollar were a reaction to the announced surprising supply cut by OPEC+, which elevated inflation concerns. The equity market was able to recoup some losses as investors turned their focus towards the manufacturing PMIs later during the trading session helping the index futures close 0.24% higher. The index futures were also boosted by the US ISM Manufacturing PMI report for March, which showed that the economic activity slumped to a near three-year low as new orders plunged, which could support a potential pause in the Fed’s current monetary policy tightening.
The index price action is currently trading within a wide ascending channel as the bulls continue to march higher, with the price action above the 50-day moving average. Investors could be wary not to push the price too high before the crucial Nonfarm Payroll (NFP) data later this week.
Therefore, there is a high potential for consolidation between the resistance level at 13555.25 and the support level at 12949.75, heading towards the crucial macroeconomic report on Friday. Nevertheless, a breakout above the 13555.25 resistance level, supported by significant volume, could push the price towards the next resistance level at 13740.75. A breakout above the resistance level at 13740.75 could confirm the presence of buyers. The bears could look at the breakout below 12569.25 for confirmation of bearish sentiment if the price action is able to push below the initial support level of 12949.75.
The US equity market has had an eventful start to a crucial week and can still be in for a volatile few days ahead of the NFP data on Friday. Thus, an investor could look to a breakout above the 13740.75 or a breakout below the 12569.25 for a possible trading opportunity.
Sources: TradingView, Reuters, CNBC.
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