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Week Ahead: Will Fed Decision Trigger NQ100_m Breakout?

  • Exceptional list of high-risk events next week
  • Our focus falls on Fed decision which could move NQ100_m
  • Fed expected to leave rates unchanged
  • Much focus will be on any clues offered on future rate moves 
  • NQ100_m breakout on horizon with 15200 and 15630 key levels of interest

The exceptional list of high-risk events and top-tier economic reports could rock global financial markets in the week ahead!

All eyes will be on the central bank mashup including the Federal Reserve, Bank of England (BoE), and Bank of Japan (BoJ) among many others. Key economic data from the UK, Eurozone, and Japan to name a few will also be in focus:

Monday, September 18 

  • CAD: Canada housing starts

Tuesday, September 19

  • CAD: Canada CPI
  • AUD: RBA meeting minutes
  • EUR: Eurozone CPI
  • USD: US housing starts

Wednesday, September 20

  • CNH: China loan prime rates
  • EUR: Eurozone new car registrations
  • JPY: Japan trade
  • CAD: BoC meeting minutes
  • GBP: UK August CPI
  • USD: Fed rate decision

Thursday, September 21

  • CHF: SNB rate decision
  • EUR: Eurozone consumer confidence
  • NZD: New Zealand GDP
  • GBP: BoE rate decision
  • USD: leading index, initial jobless claims

Friday, September 22

  • AUD: Judo Bank Australia PMI’s  
  • JPY: BOJ rate decision, CPI, PMI’s
  • CAD: Canada retail sales
  • EUR: Eurozone S&P Global PMI’s, Germany PMI’s
  • GBP: UK S&P Global/CIPS PMI’s  
  • USD: S&P Global Manufacturing PMI

Given the jampacked economic schedule, it may be wise to fasten your seatbelts and get ready for a wild ride.

Our focus falls on the September FOMC meeting which could trigger a major move on the NQ100_m.

The Federal Reserve is widely expected to leave interest rates unchanged at 5.5% at the September 19-20 meeting. However, much focus will be on what vital clues the central bank offers on future rate hikes. Investors will also be keeping a close eye on the economic projections, including the ones for interest rates known as the dot plot.

Ultimately, if Jerome Powell strikes a hawkish tone during his press conference and leaves the door open for further rates, this could boost bets around the Fed making a move before the end of 2023.

As of writing, traders have practically ruled out the possibility of a rate hike next week. However, the probability of a 25 basis point hike by November stands at 35% with this jumping to 44% by December, according to Fed funds futures.

How might the Fed decision impact the NQ100_m?

The NQ100_m index is filled with tech stocks that dislike higher interest rates because their value is based on earnings projected in the future.

  • The NQ100_m could find itself under fresh selling pressure if the Federal Reserve signals that one more rate hike is still on the table in 2023.
  • Should Jerome Powell strike a cautious tone, and the economic projections/dot plot suggests that the Fed may be done with raising rates, this could push the NQ100_m higher.

Looking at the technical picture…

The NQ100_m remains trapped within a range on the daily charts with support at 15200 and resistance at 15630. Prices seem to be riding above the 50-day SMA while the MACD trades above zero. A breakout could be on the horizon, but this may require the assistance of a potent fundamental spark.

  • A solid daily close and breakout above 15630 may inspire a move higher toward 15800 and 15947, respectively.
  • Should prices sink below 15200, this could trigger a decline towards 15000 and 14670.

Zooming out, there is a larger range on the weekly charts with support at 14670 and resistance at 15840. A solid breakout and close above 15840 may inspire a move to levels not seen since January 2022 at 16500. Should prices slip below 14670, the next key level of interest can be found around 14440.


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