September E-mini NASDAQ-100 Index futures are trading higher shortly after the cash market opening, but backing off its earlier high. The early rally was fueled by dovish comments from New York Federal Reserve President John Williams late Thursday.
Williams said the Federal Reserve should “act quickly” if it sees the economy slowing. Investors interpreted this to mean the central bank could raise rates as much as 50-basis points at its July 30-31 policy meeting. Prices started to retreat after a New York Fed official downplayed the comments, saying they were academic in nature.
Also keeping a lid on prices were Thursday’s steep sell-off in shares of Netflix.
At 13:50 GMT, September NASDAQ-100 Index futures are trading 7950.00, up 16.50 or +0.20%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of a closing price reversal top at 8001.50 on July 16 and its subsequent confirmation.
A trade through 8001.50 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 7743.00.
The minor trend is also up. A trade though 7833.00 will change the minor trend to down. This will reaffirm the shift in momentum to down.
The minor range is 8001.50 to 7833.00. Its 50% level or pivot at 7917.25 is new support.
The short-term range is 7743.00 to 8001.50. Its retracement zone at 7872.25 to 7841.75 is also support. This area stopped the selling on Thursday.
The intermediate range is 7446.25 to 8001.50. If the trend changes to down then look for the selling to extend into its retracement zone at 7723.75 to 7658.25.
Daily Technical Forecast
Based on the early price action, the direction of the September NASDAQ-100 Index is likely to be determined by trader reaction to a pair of uptrending angles at 7999.00 and 8025.00 on the upside, and the minor pivot at 7917.25 on the downside.
Overtaking and sustaining the rally over 8025.00 will indicate the buying is getting stronger. This could trigger a rally into the main top at 8001.50.
The inability to overcome 7999.00 and 8025.00 will signal the presence of sellers. Crossing to the weak side of the pivot at 7917.25 will indicate the selling is getting stronger. This should lead to a labored break with potential targets at 7872.25, 7871.00, 7846.25 and 7841.75.
The selling will open up to the downside if 7833.00 fails as support.
This article was originally posted on FX Empire
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