The proposed passage of the “Hong Kong” bill into law by the US Congress as well as US President Trump’s statements on his dissatisfaction with the level of China’s commitment to getting a trade deal done are just two of several events that are breeding pessimism around the US-China trade deal process.
These events dampened the mood of investors and sent the Nasdaq 100 index towards a lower open this Thursday.
After surging to all-time highs on Tuesday, Wednesday’s profit-taking has evolved into full selloff mode as both sides in the US-China trade dispute clash over the proposed law. The Hong Kong Human Rights and Democracy Act, if signed into law, would require the region to be certified as having enough autonomy from Beijing to enjoy certain trade benefits from the US, and would also lead to a ban on certain crowd-control equipment to the Hong Kong government. The proposed law has angered Beijing and experts say it would complicate attempts to signing any US-China trade agreements.
However, early losses in the Nasdaq have been pared as an article from the Wall Street Journal emerged, citing people close to the situation as saying that China’s chief negotiator has invited US Treasury Secretary Mnuchin and the US Trade Representative Lighthizer for face-to-face talks.
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Technical Outlook for Nasdaq 100 Index
The Nasdaq 100 composite index is presently trading at 8263.08 (as at the time of writing), down from its all-time high of 8372.60 recorded on Nov 19.
Immediate support is seen at 8194.14, which is where the lows of early November 2019 are seen. Below this level, previous highs of 8109.82 seen on October 28, 29 and 30 remain the next downside targets. This level is a former resistance now acting as a support in role reversal.
On the flip side, recovery will allow the Nasdaq to retest the its highest price levels, which are now the new resistance levels to beat.More content
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