Nasdaq 100 Tests New Record Highs as Traders Await FOMC Statement

Pervading risk-off sentiment across world markets is starting to pinch the Nasdaq 100, as the index asset traded 0.26% lower a few minutes before market open. Late yesterday, the Nasdaq 100 was able to stage a recovery after trading lower for hours, to close at a new record high of 9902.0. This followed the gradual reopening of New York, the financial capital of the US.

InvestingCube's S&R Levels

NAS100

NAS100 (11294)

Not in Sell Zone

STOP

SELL

TP1

11182

TP2

11000

However, a string of news put the markets off and sent traders into safe-haven assets this Tuesday, testing the resolve of traders on the index. One of the news releases that got traders worried is the announcement by North Korea that it was disconnecting all communication lines with the South by noon today. Pyongyang also announced its intention to close the liaison office with the South if more defections were allowed by the southern neighbour.

With thirty minutes into the day’s trading session, the Nasdaq 100 has started to push higher, clocking in at 9911.5 to test a new all-time high as at the time of writing. Traders are also on the lookout for tomorrow’s FOMC decision and Economic Projections. This will provide some insight into the thinking behind the some of the recent stimulus moves by the Fed, and could be relevant to near-term price action on the US market indices.

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Technical Outlook for Nasdaq 100

The Nasdaq 100 index is once more pushing towards the all-time highs recorded yesterday, after bouncing on the 2.0 Fibonacci extension line at 9860.4. However, it is about to make contact with the channel’s upper border, a few points below yesterday’s close. Further upside in the near-term may have to rely on the ability of the index to push above this resistance firmly. If this move is successful, we could see a test of yesterday’s highs, with the 227.2% Fibonacci extension at 10294.4 constituting the immediate resistance target. 10521.0 (241.4% Fibonacci extension from the February 2020 high to the March 2020 low) could also become relevant if the index keeps pushing higher. 

On the flip side, failure to surmount the upper border of the channel or yesterday’s high may allow a pullback to the 9860.4 support (2.0 Fibonacci extension), with 9626.4, 9452.0 and 9264.4 continuing to play their recent roles as support targets. Only a breakdown of the channel’s lower border will allow the Nasdaq 100 target the 9167.4 and 9092.3 support levels.

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