Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

The Invesco QQQ Trust (QQQ), previously known as the PowerShares QQQ, has recently emerged from a three-week streak of losses, showing resilience in the face of a challenging market environment. In the last week’s trading session, QQQ managed to scrape up a ten basis point gain, marking a notable shift in sentiment. 

U.S. stocks have been grappling with pressures stemming from the strength of the Greenback and the resurgence of U.S. bond yields. The 10-year Treasury yields recently reached a peak of 4.462%, a level not seen since October 2007. This surge in yields has led investors to seek refuge in the safety of the U.S. dollar due to its higher-yielding potential. 

Source: Trive – TradingView, Nkosilathi Dube 

The upcoming week is poised to be eventful, with a flurry of economic data releases that could significantly influence the trajectory of QQQ and its underlying asset, the NASDAQ100. All eyes will be on the eagerly awaited Nonfarm Payrolls report, which will provide crucial insights into the Federal Reserve’s potential actions regarding interest rates. Additionally, data on U.S. manufacturing and services PMIs, along with Jolts Job Openings figures, will offer valuable glimpses into the state of the U.S. economy. 

Technical 

The QQQ, once riding a bullish wave, now faces a shift in momentum, transitioning from an uptrend to a downtrend. This decline is marked by the emergence of a discernible descending channel pattern, coupled with a significant breach below the 100-day moving average from this year’s peak. 

At $387.98, a pinnacle was reached for the year, swiftly establishing itself as a formidable resistance point, ushering in a wave of sellers. Conversely, $354.70 emerged as a vital support level following a sharp upward turn, only stalling at the $380.84 mark, aligning with the upper boundary of the descending channel. 

With the retest of the support level, signs of a potential upswing are discernible as the price approaches the 50% Fibonacci Retracement level. However, looming economic data releases are poised to sway sentiment, prompting cautious manoeuvres from traders. Should $354.70 hold steadfast as support, optimistic traders may aim for the $380.84 level. Conversely, a substantial volume-driven breach below this level could expose the ETF to further downside pressures, with $348.18 looming as a potential destination. 

Summary 

The QQQ has navigated through a challenging market landscape, breaking free from a three-week losing streak. The upcoming economic data releases, particularly the Nonfarm Payrolls report, hold the potential to shape the course of QQQ and the broader market. The $354.70 level will be pivotal in determining market sentiment. 

Sources: Reuters, Invesco, TradingView