Nasdaq 100 Index Reaches Key Support

FXOpen

31 Jul 2024, 06:47

Important news days are ahead, with high volatility likely in the US stock markets.

The Federal Open Market Committee (FOMC) will announce its monetary policy decision today at 21:00 GMT+3. Wall Street expects the FOMC to keep the rate unchanged at 5.25%. Traders will then analyse Fed Chair Jerome Powell's speech at 21:30 GMT+3 to assess the likelihood of a quarter-point rate cut in mid-September, as they anticipate.

In addition to this key news:

→ ADP will release its National Employment Report for July at 15:15 GMT+3 today. According to ForexFactory, analysts expect an increase of 146,000 jobs (excluding the agricultural sector) for the month.

→ The Institute for Supply Management will publish its Chicago Business Barometer for July today. The National Association of Realtors will release real estate market news.

→ Major companies are reporting their second-quarter results, including Meta (report due on 31 July), Apple, and Amazon (1 August).

Given that the Nasdaq 100 (US Tech 100 mini on FXOpen) has fallen more than 8% since 11 July, market participants might be wary of the downward trend continuing. However, the chart offers some hope for bulls.

According to technical analysis of the Nasdaq 100 Index (US Tech 100 mini on FXOpen):

→ The price is near the lower boundary of the ascending channel (shown in blue), which may act as support.

→ The price is close to the 18,600 level, from which the rally to historical highs began (shown with black lines). Bulls might draw strength from this level.

→ The chart shows two lows (indicated with arrows). On the second low, the price broke the first and sharply recovered, indicating aggressive demand. Adding almost any oscillator to the chart would show a bullish divergence.

In the best-case scenario for investors, the upcoming events might halt the negative trend of the second half of July, and the Nasdaq 100 (US Tech 100 mini on FXOpen) might even attempt to resume the uptrend within the blue channel (as seen in April-May).

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