Piece written by Alexa Smith, Trive Financial Market Analyst 

The Nasdaq 100 Futures (CME: NQ) soared over 2% since Monday due to a rise in US Treasury yields to levels not seen in over a decade and a positive outlook on earnings expectations. This flurry of activity unfolded against the backdrop of the upcoming Federal Reserve meeting in Jackson Hole, Wyoming, which is expected to share insights into expectations for the broader monetary policy.  

The 10-year Treasury yield ascended to 4.354%, a pinnacle unseen since November 2007 and predating the Great Financial Crisis triggered by the collapse of Lehman Brothers almost a year later. The mounting concerns among investors regarding the bond market’s selloff are gaining momentum, prompting a shift of focus towards Federal Reserve Chair Jerome Powell and his impending pronouncements on peak interest rates later in the week. Meanwhile, Nvidia (ISIN: US67066G1040) garnered significant attention on the index as HSBC raised its target price for the company, lending a much-needed boost to the struggling Futures.   

Technical 

A descending channel pattern formed on the 4H Chart, encouraging the Nasdaq 100 Futures to cushion at the 14646.25 major support. Downside momentum gained traction when the 50-day moving average crossed the 100-day moving average at the 15712.75 level. The index futures attempted a breakout at the 50% level but were met with contention from oversold levels.  

After a swift rejection of the 14646.25 major support, the index futures ticked higher, where a breakout from the 14966.50 level at the 23.60% Fibonacci level bolstered the price action to intersect with the 50-day moving average. If the 50-day moving average fails to hold as key resistance, the 15324.75 resistance at the 50% level may be the next point of interest in furthering an upward trend.  

However, the 50-day moving average could hold as it did at the 50% level, which may encourage a pullback towards the 14646.25 major support. If this major support fails to hold, the channel’s lower boundary may mark a pivot point for the continuation of a downward trend. 

Summary 

The Nasdaq 100 Futures have rebounded from the 14646.25 major support due to a surge in Nvidia’s share price. Since the price action is intersecting with the 50-day moving average, the index futures may attempt to retest the 15324.75 resistance at the 50% level, which may mark a pivot point for a reversal. In contrast, a pullback from the 50-day moving average may mark the continuation of a downtrend towards the channel’s lower boundary. 

Sources: TradingView, Reuters 

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