It’s all about US economic data this week, which has placed tech firmly on everyone’s radar ahead of a very important US earnings season which kicks off today.
The Nasdaq 100 Index Futures (CME: NQ) came alive yesterday after positive economic data releases, which saw the tech-heavy index up nearly 2% on the day. The surprise decline in the US Producer Price Index (PPI) and a higher jobless claims number support the outlook that a Fed interest rate pause could be imminent.
Technical
The price action of the Nasdaq was consolidating between the major resistance level of 13236 (red line) and the 12938 support (black dotted line). We need to see the price move, preferably close above the major resistance, to negate further down pressure. For the bulls, a break of this resistance level could signal that the price action, if supported by a positive macroeconomic environment, could potentially push higher to the next major resistance around 13691 (green line).
For the bears which see no resolution of the mixed macroeconomic picture, the 12938 support becomes a focal point. If the support does not hold, then we could potentially see lower levels on the cards around the 12634 (solid black line) as a level of interest.
Summary
The US earnings season and US retail sales are firmly in focus today as these economic data points could see volatility return to the US markets. The possibility does exit that price could potentially move higher supported by a positive news event, which could see the major resistance around 13691 as a level of interest for the bulls. If the price action breaks the 12938 support, the bears are expected to lower prices to the next support level, around 12634.
Sources: Reuters, TradingView.
DISCLAIMER:This report has been prepared by our Group company. This document is not intended as an offer, solicitation or recommendation to buy or sell financial instruments or to make any investment. The Group has used reasonable efforts to obtain information from reliable sources and the report is provided without representation or warranty of any kind (neither expressed nor implied). The Group disclaims liability for any publication not being complete, accurate, suitable and relevant for the recipient. Specifically, the Group disclaims liability towards any user and other recipients of this report.
