Nasdaq Futures Slump Continues as Uptrend Line Breaks Amid Geopolitical Tensions
Wednesday Market Overview:
Following comments from Republican presidential candidate Donald Trump suggesting that Taiwan should pay for its defense costs to the United States, most Asian stocks declined on Wednesday, with losses concentrated around Taiwan and China. Futures indices also turned red as investor risk aversion increased. Despite speculation about potential interest rate cuts and strong quarterly earnings reports from tech companies painting a positive outlook, the Nasdaq futures index has faced downward pressure.
Technical Analysis:
The Nasdaq futures index has broken its long-standing upward trendline during the quarterly earnings season. Sellers are attempting to push the price below the critical support level of 20,504.00. Successfully doing so would pave the way for further declines, potentially bringing the price down to the immediate support at 20,455.86. Lower targets include 20,383.46, 20,327.00, and 20,206.46.
Alternative Scenario:
If buyers return, the immediate resistance at the 34-period moving average level of 20,571.61 and the previous high at 20,681.00 will be crucial hurdles. Overcoming these levels could halt the current downtrend and potentially reverse it.
Key Levels:
Resistance Levels:
- Resistance 3: 20,681.00
- Resistance 2: 20,571.61
- Resistance 1: 20,504.00
Current Price (at the time of analysis): 20,481.12
Support Levels:
- Support 1: 20,455.86
- Support 2: 20,383.46
- Support 3: 20,327.00
- Support 4: 20,206.46
Impactful Events:
European inflation reports due at midday on Wednesday, alongside US housing market data expected in the afternoon, are the key events likely to impact the Nasdaq index. Increased investor risk aversion could lead to further declines in the index.
Oscillators and Risk Warnings:
RSI (Relative Strength Index): Bearish, indicating continued selling pressure.
MACD (Moving Average Convergence Divergence): Bearish, supporting the downward trend.
Moving Averages: Bearish, reflecting the negative price action.
Conclusion:
The Nasdaq futures index is under significant selling pressure after breaking a key uptrend line. Successfully closing below 20,504.00 could trigger further declines to 20,455.86, 20,383.46, 20,327.00, and 20,206.46. Conversely, a rebound from these levels would need to overcome resistances at 20,571.61 and 20,681.00 to negate the current bearish outlook.
Investors should monitor European inflation data and US housing market reports for further insights into market sentiment and potential impacts on the Nasdaq futures index. Staying attuned to these key events and technical levels will help traders navigate the current market environment effectively.
Find us on
