Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

The Invesco QQQ Trust ETF (ISIN: US46090E1038) has recently captured the attention of both investors and market observers. Last week, this ETF defied expectations as it weathered the storm of a resurgent U.S. Greenback, marked by robust nonfarm payrolls that exceeded forecasts by nearly double at 336K. 

Amidst heightened market volatility and surging U.S. 10-year treasury yields reminiscent of 16-year highs, the QQQ ETF managed to close its second consecutive week in positive territory. This remarkable resilience was attributed to an intriguing paradox—a significant increase in employment coupled with a conspicuous deceleration in wage growth, potentially easing inflationary pressures. 

However, as geopolitical tensions in the Middle East elevate Treasury prices, and the September U.S. jobs report fuels speculation on inflation figures, this week may introduce new challenges for the QQQ ETF. 

Technical 

The Invesco QQQ Trust ETF finds itself ensnared in a discernible downtrend, as indicated by its position below the 100-day moving average within a descending channel pattern. The $378.26 threshold stands as a formidable resistance point, marking the upper bound of this descending channel where selling pressure has been notably fierce. 

Yet, the bears’ influence waned at the $351.36 level, instigating a resurgence of buyer confidence. Presently, a retracement is underway, with the QQQ ETF intersecting the pivotal 50% Fibonacci Retracement level. If sellers uphold this level as an intermediate resistance, a reversal may be imminent, with the $351.36 support poised for renewed attention. 

In contrast, a decisive breakout above the 50% level, bolstered by substantial trading volume, could signal the presence of eager buyers, potentially paving the way for a retracement towards the formidable $378.26 barrier. 

Summary 

As the week unfolds, all eyes are fixed on pivotal events: the FOMC minutes and the U.S. Inflation Rate. While a slight dip in inflation is anticipated, an unexpected surge could spell downside risks for the QQQ ETF, possibly gravitating towards the crucial $351.36 level. 

Sources: U.S. Bureau of Labor Statistics, Reuters, TradingView