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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Weakens Under 7624.50, Could Turn Bullish Over 7666.25

James Hyerczyk

December E-mini NASDAQ-100 Index futures are trading sharply lower shortly after the cash market opening after optimism around this week’s upcoming U.S.-China trade talks failed.

Three factors are contributing to today’s sell-off. Firstly, the South China Morning Post downplayed a possible trade deal. Secondly, investors fear retaliation after the U.S. expanded its blacklist to include some of China’s top artificial intelligence firms on Monday. Thirdly, Bloomberg News reported the White House is looking to limit Chinese stocks within government pension funds.

At 14:13 GMT, December E-mini NASDAQ-100 Index futures are trading 7642.50 down, 97.50 or -1.26%.

Daily December E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 7474.25 will signal a resumption of the downtrend following a two day counter-trend rally.

The minor trend is also down. A trade through 7799.25 will change the minor trend to up and shift momentum to the upside.

The major retracement zone is 7624.50 to 7535.00. This is potential support.

The short-term range is 7973.75 to 7474.25. Its retracement zone at 7724.00 to 7783.00 is potential resistance. This zone stopped the selling at 7799.75 on Monday and earlier today.

Daily Technical Forecast

Based on the early price action and the current price at 7642.50, the direction of the December E-mini NASDAQ-100 Index the rest of the session on Tuesday is likely to be determined by trader reaction to the main 50% level at 7624.50 and the uptrending Gann angle at 7666.25

Bullish Scenario

Overtaking and sustaining a rally over 7666.25 will indicate the return of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the short-term 50% level at 7724.00, followed by a downtrending Gann angle at 7764.25 and the short-term Fibonacci level at 7783.00.

Bearish Scenario

A sustained move under 7624.50 will indicate the selling is getting stronger. This could trigger an acceleration into an uptrending Gann angle at 7570.25, followed by a support cluster at 7535.00 to 7522.25, and another uptrending Gann angle at 7498.25. This is the last potential support angle before the 7474.25 main bottom.

This article was originally posted on FX Empire