Nasdaq 100 - Upcoming FOMC poses threat to further rise in price

Last week major U.S. indices attempted to reverse to the upside. This was accompanied by technical indicators trying to break their medium-term bearish structures. However, RSI, MACD and Stochastic failed to fulfill this transformation which resulted in market meltdown. Nasdaq continuous futures (NQ1!) broke below significant support level at 14 031 USD. At the same time, volume saw an increase which signals that the selling pressure is strengthening. The FED's meeting is coming closer and the prospect of higher interest rates poses substantial threat to further rise of NQ1!. We expect selling pressure and elevated volatility to stay persistent ahead of the FED's meeting. We think the upcoming increase in interest rates will put additional stress on the U.S. economy; indeed, we think it will drag major indices lower. Because of that we would like to set a short-term price target for NQ1! to 13 750 USD and medium-term price target to 13 500 USD.

Technical analysis - daily time frame
RSI, MACD and Stochastic are bearish. DM+ and DM- show bearish conditions in the market. ADX resumed growth which suggests the downtred has awakened and started to strengthen again. Overall, the daily time frame is bearish.

Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bearish. Same applies to DM+ and DM-. ADX exhibits growth which signals that the downtrend started to gain momentum again.

Support and resistance

Short-term support lies at 13 706 USD. Support 1 is at 12 915 USD and Support 2 at 12 207.25 USD. Resistance 1 appears at 15 260 UDS and Resistance 2 lies at 16 009.25 USD. Major resistance level can be found at 16 767.50 USD.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.

Trade stängt: målet nått:

Our short-term price target of 13 750 USD has been reached. Our new short-term price target is 13 500 USD.

Trade stängt: målet nått:

Our price target of 13 500 USD has been reached.