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Nio Share Price Faces Headwinds Heading into Q4 2022

The Nio share price is up 1.99% this Friday, allowing the stock to pare some of this week’s losses. However, the stock remains on course for a double-digit weekly drop as investors turn their backs on risky assets. 

The Chinese Yuan hit a new record low against the US Dollar on Thursday. Risk-associated currencies have also dropped against the greenback. This situation means that importing the raw materials needed to produce electric vehicles becomes more expensive, increasing the cost profile of companies like Nio. This reflects in the stock’s 20% drop in September 2022. 

The Nio share price will face additional pressures in Q4 2022. The recent US data hitting the markets is pushing the bets in favour of more rate hikes by the Fed, which could have a dollar-strengthening effect. This would raise the cost of doing business for Nio.

Furthermore, there is growing competition in the Chinese EV market after Toyota announced it would launch its bZ3 electric vehicle in China by the end of the year. This model is expected to enter the market at a lower price barrier than the Tesla or Nio brands. This may have implications on the Nio share price, except something dramatic changes the narrative of current market fundamentals. 

Nio Share Price Forecast

The bulls are attempting to resist the downward violation of the 15.88 support level (28 April and 13 June lows) and have pushed the price up in a return move. This return move has met resistance at the 15.88 price mark, now functioning as resistance in role reversal.

If the bears resist the attempts to return the price action above 15.88, this sets off a new selloff that targets the 14.31 support level (16 May low). The 15 March 2022 low at 13.16 forms an additional price target to the south. Further price deterioration makes the 10.91 support level an additional harvest point, being the site of the low of 24 July 2020. 

Conversely, a successful push above 15.88 negates the downside outlook, turning this price mark into a support. This scenario will see the bulls with momentum to attempt a run toward the 17.87 resistance (31 May and 6 September highs). If the bulls uncap this barrier, the 19.48 resistance (25-28 July and 9 September highs) becomes the new milestone. Only when this barrier gives way will the bulls have clear skies to aim for the 22.26 resistance level (5 July and 13 September 2022 highs).

Nio: Daily Chart