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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 7933.50, Weakens Under 7749.00

James Hyerczyk

September E-mini NASDAQ-100 Index futures finished lower on Wednesday, but well off its lows, suggesting the steep intraday sell-off may have been an overreaction to comments made by Federal Reserve Chairman Jerome Powell after the Fed’s interest rate decision earlier in the afternoon.

As expected, Fed policymakers voted to trim the central bank’s benchmark interest rate 25-basis points. However, investor hopes of a lengthy easing cycle were tempered by Powell’s remarks. The Fed chief triggered a hard break in the index after the said the central bank’s rate cut was a “mid-cycle adjustment,” suggesting that additional cuts later in the year were not a sure thing.

Going into yesterday’s session, investors had priced in additional cuts for September and December so the drop in the market was likely speculators bailing out of positions put on in anticipation of a more aggressive Fed.

On Wednesday, September E-mini NASDAQ-100 Index futures settled at 7866.75, down 96.50 or -1.23%.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend changed to down on a trade through 7815.25. Taking out Wednesday’s low at 7782.25 will indicate the selling is getting stronger. This could trigger a further break into the next main bottom at 7743.00.

On the upside, the main trend changes to up on a move through 8051.75.

The minor range is 7815.25 to 8051.75. Its 50% level or pivot at 7933.50 is resistance today.

The intermediate range is 7446.25 to 8051.75. Its retracement zone at 7749.00 to 7677.50 is the nearest downside target.

The main range is 6969.00 to 8051.75. If 7677.55 fails as support then its retracement zone at 7510.25 to 7382.50 will become the primary downside target.

Daily Swing Chart Technical Forecast

The market settled in between support and resistance. This could be a sign of investor indecision.

Bullish Scenario

If buyers come in early on Thursday then look for a rally into its 50% level or pivot at 7933.50. Sellers could come in on the first test of this level, but if it fails then look for a potential acceleration to the upside with the next major target the contract high at 8051.75.

Bearish Scenario

If the rally is rejected at 7933.50 then this will signal the presence of sellers. This could lead to a retest of yesterday’s low at 7782.25. Taking out this level will indicate the selling is getting stronger. This could lead to a quick test of the 50% level at 7749.00, followed closely by the main bottom at 7743.00.

A trade through 7743.00 could trigger a break into the Fibonacci level at 7677.50. This is the trigger point for an acceleration to the downside with 7510.25 the next major target.

Overview

Holding between 7933.50 and 7749.00 could produce a choppy trade. These are the potential trigger points for accelerations to the upside and downside, respectively.

This article was originally posted on FX Empire

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