NAS100 Slides after the Strong US Jobs Report, as Markets Brace for another Inflation Update

NAS100 Analysis

The US index comes from its best month of the year and the impressive recovery from June's multi-month lows. It has also posted three consecutive profitable weeks, but declined on Friday after the blowout jobs report from the US.

The creation of 528,000 new jobs in July, the return of Unemployment to pre-pandemic levels (3.5%) and the elevated wages, which put upward pressure on inflation, worked against the stock market, by boosting expectations around the Fed's tightening path.

These had eased after the central bank's recent hint of a potentially slower pace of rate hikes ahead, but Friday's impressive employment figures made markets more aggressive. CME's FedWatch Tool is pricing in another large 0.75% rise in September, with nearly 70% chances at the time of writing. [1]

On the other hand, they also vindicate the Fed's narrative against recession, but it looks like such fears have not gone away, as the economy contracted again during the second quarter.

There is still a long time until the next policy meeting and officials will have the opportunity to go over some critical data points. The first of those is expected on Wednesday, in the form of the latest CPI inflation release, which can determine the trajectory of NAS100 and spark volatility.

The tech-heavy index retreats for third straight day and the Relative Strength Index (RSI) breaches the 50 mark - factors that can send it towards 12,800. Further weakness below 12,654-12,480 though, will need strong catalyst, as it contains strong technical levels.

Trade the News: View our Economic Calendar

Despite the recent weakness, NAS100 has covered around half of its third quarter plunge (from high to low) and near-term bias is on the upside, as long as it trades above the EMA200 (black line). As such, it has the ability to set new highs and surpass 13,560-13,654. It will probably need fresh impetus for such move, that will bring 14,302 in the spotlight.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 05 Oct 2022 https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html#

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}