- Investors are breathing easier after the recent selloff.
- Central banks will not pause in their fight against inflation.
- Recession fears are still plaguing most investors.
The Nasdaq 100 (NQ) futures prices are pushing higher on Tuesday as some risk sentiment returns to the equity market. The dollar is pushing lower after its rally, showing a pause in the recent recession fears. However, these concerns are not entirely out of the picture, as aggressive central bank hikes could still push the global economy into a recession.
The index advanced by 2.12% after yesterday’s US holiday, but this move could be short-lived.
“I think the green that we’re seeing this morning is not necessarily a function that people are moving back towards risk assets. It’s just the normal behavior on the huge selloff to get some reprieve and breathing space because, fundamentally, nothing changed on the macro front last week,” said Kerry Craig, global market strategist at JPMorgan Asset Management.
Central banks are still pushing for higher and faster interest rates, including the Bank of England and the Reserve Bank of Australia. RBA Governor Philip Lowe warned Australians of more rate hikes, saying the current interest rates were still not high enough to control inflation. Later in the day, investors will be listening to two Federal Reserve policymakers.
Oil prices rose on supply concerns. Janet Yellen, US Treasury Secretary, said the US was in talks with Canada to further restrict Moscow’s energy revenue by putting a price cap on Russian oil. At the macro level, there are still downward pressures on US markets, which could lead to a return of collapsing prices.
Nasdaq 100 (NQ) futures technical forecast:
Looking at the 4-hour chart, we see the price is pushing higher in a downtrend. This move is a retracement and might find resistance at 12000.00 from the 30-SMA. Bears are still in charge of this market, as seen in how the price has been trading below the SMA. It is also shown by the RSI, trading below the 50 level.
If the price pushes to 12000.00 and finds resistance, we could see a continuation in the trend to the downside and a break below 11000.00.