June E-mini NASDAQ-100 Index futures are trading lower on Monday, pressured by a steep drop in the Asian markets. The catalyst behind the selling pressure is an inverted yield curve in the U.S. which is raising concerns over a potential U.S. recession later this year. The inversion is taking place between the 3-month Treasury Bill and the 10-year Treasury Note. Traders are also expressing concerns over slowing global economic growth and the lack of progress in U.S.-China trade talks.
At 06:25 GMT, June E-mini NASDAQ-100 Index futures are at 7308.75, down 60.00 or -0.82%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum shifted to the downside on Friday with the formation of a potentially bearish closing price reversal top and its subsequent confirmation earlier today.
A trade through 7544.75 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 6965.75.
The minor trend is down. It turned down earlier today when sellers took out the minor bottom at 7349.50. The move also confirmed the shift in momentum.
The main range is 6965.75 to 7544.75. Its retracement zone at 7255.25 to .7187.00 is the primary downside target. Since the main trend is up, buyers are likely to show up on a test of this area so look for a technical bounce.
Daily Technical Forecast
Based on the early price action and the current price at 7308.75, the direction of the June E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to the uptrending Gann angle at 7317.75.
A sustained move over 7317.75 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the rally to possibly extend into the steep downtrending Gann angle at 7480.75. Aggressive counter-trend sellers could come in on a test of this angle. Overtaking it, however, could trigger an acceleration to the upside with the next target angle coming in at 7512.75.
A sustained move under .7317.75 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target the 50% level at 7255.25. Look for buyers to come in on the first test of this level. If it fails then look for the selling to possibly extend into the Fibonacci level at .7187. Once again, look for buyers on the first test of this level.
This article was originally posted on FX Empire
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