June E-mini NASDAQ-100 Index futures are trading higher as we approach the last hour of cash market trading. The market has been underpinned all session by short-covering and some light speculative buying tied to the possibility of a sooner than expected rate cut by the Federal Reserve.
Earlier in the week, Fed Chair Jerome Powell ignited the rally when he deviated from his call to remain “patient” about interest rates while adding the Fed would keep an eye on current developments in the economy, and would do what it must to “sustain the expansion.” Investors read this to mean the Fed would lower interest rates before year-end.
At 19:03 GMT, June E-mini NASDAQ-100 Index futures are trading 7264.00, up 35.50 or +0.49%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The main trend will change to up on a trade through 7641.00. This is highly unlikely today, but the index is in a position to complete a short-term 50% to 61.8% retracement.
A trade through 6941.25 will signal a resumption of the downtrend.
The short-term range is 7641.00 to 6941.25. Its retracement zone at 7291.25 to 7373.75 is the primary upside target. Trader reaction to this zone will determine the near-term direction of the index.
Since the main trend is down, sellers are likely to show up on a test of the zone. They are going to try to form a secondary lower top. If buyers can overtake the upper or Fibonacci level of the zone then look for the rally to continue. If the rally fails at 7291.25 then look for the start of a sell-off.
Daily Technical Forecast
Based on the late session price action, the direction of the June E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to the 50% level at 7291.25.
A sustained move over 7291.25 will indicate the buying is getting stronger into the close. If the move generates enough upside momentum then look for the rally to possibly extend into the Fibonacci level at 7373.75.
A failure to extend the rally over 7291.25 will signal the presence of buyers. If the selling is strong enough to continue on Friday then we’ll be looking for a 50% to 61.8% retracement of the rally from 6941.25.
This article was originally posted on FX Empire
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