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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Hot CPI Reading Over 9% Could Sink Technology Shares

·2 minuto per la lettura

September E-mini NASDAQ-100 Index futures are edging higher early Wednesday as investors positioned themselves ahead of a key inflation report that is expected to show a new multi-year high.

The headline consumer price index, slated for release at 12:30 GMT, is expected to climb by 8.8% in June on a year-over-year basis, according to a Dow Jones survey of economists. That would be even higher than May’s 8.6% reading, which was the biggest since 1981.

Core inflation, on the other hand, is expected to continue to cool, slowing now for a third month. Excluding energy and food, June’s core CPI was expected to rise 0.5%, compared with 0.6% in May. That would be 5.7% year-over-year jump in June, down from 6% in May. Core CPI peaked at 6.5% in March.

At 09:06 GMT, September E-mini NASDAQ-100 Index futures are trading 11825.50, up 46.50 or +0.39%. On Tuesday, the Invesco QQQ Trust ETF (QQQ) settled at $286.22, down $2.82 or -0.98%.

A red hot reading could prompt the Federal Reserve to hike another 75 basis points during its July 26-27 meeting.

Stocks could rally if the CPI numbers meet expectations since the July rate hike is already priced into the market. A headline reading of 9.0% or higher could trigger a sharp break in technology stocks.

Short-Term Outlook

Trader reaction to the minor pivot at 11806.50 is likely to determine the direction of the September E-mini NASDAQ-100 Index on Wednesday.

Bearish Scenario

A sustained move under 11806.50 will indicate the presence of sellers. The first target is a minor retracement zone at 11671.25 to 11524.50.

If 11524.50 fails to hold then look for a break into the main bottom at 11351.00. Taking out this level will reaffirm the downtrend with the next target another main bottom at 11068.50.

Bullish Scenario

A sustained move over 11806.50 will signal the presence of buyers. This could trigger a rally into a 50% level at 12021.25, followed by a main top at 12211.00 and a Fibonacci level at 12246.00.

Although the main trend will change to up on a trade through 12211.00, a breakout over the other main top at 12262.00 could trigger an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire