Nasdaq 100 Off Intraday Lows, But Faces New Headwinds

Published by
Written By: Eno Eteng (MSTA)
Share
    Summary:
  • The Nasdaq 100 index is off intraday lows on the back of relatively upbeat US ISM Manufacturing PMI data, but the index is facing new headwinds.

The Nasdaq 100 started the day 131.5 points off the pace but has been able to bounce off lows after the US ISM Non-Manufacturing PMI came in marginally lower than expected. The US ISM Manufacturing PMI came in at 43.1, which was higher than the previous level of 41.5 but less than market expectations of 43.5. 

The relative upbeat nature of the report was able to lift the sentiment on the Nasdaq 100 slightly, allowing the asset to come within inches of last week’s closing price. However, upside continues to be limited by national events (the riots that have followed the killing of George Floyd by police) and the latest from the US-China tensions over the national security law. 

Bloomberg reported earlier today that the Chinese government had asked its major agricultural importers to stop buying soybeans and pork from US farmers. The violence and looting taking place across several cities in the US following George Floyd’s killing by police have put pressure on the retail market, which is already struggling from the coronavirus-associated lockdowns. The Nasdaq 100 is facing significant headwinds. 

Download our Q2 Market Global Market Outlook

Technical Outlook for Nasdaq 100

The Nasdaq 100 continues to trade in the middle of the ascending channel. The index needs to close above today’s lows to confirm the breakout of 9452.0. This move opens the door for a challenge of the 9626.4 resistance. This level needs to be breached for the upper channel border to come into view, somewhere close to the 2020 all-time highs. 

Failure to break 9626.4 could lead to a pullback, and if the headwinds being faced by retailers in the US and tensions between the US and China escalate, markets could get spooked, and a selloff could ensue. This scenario allows for a retest of 9452.0, 9264.4, 9167.4 and 9092.3, in that order.

Written By: Eno Eteng (MSTA)

Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about stocks, Forex, and CFDs. Since 2009, he has consulted several financial companies as a trader and strategy developer. His work can be seen on several forex blogs and trading educational websites.

Published by
Written By: Eno Eteng (MSTA)