Nasdaq 100 facing technical and geopolitical crosscurrents
THE Nasdaq 100 Index (NDX) enters the final week of June at a decisive technical inflection point, trading near 21,720 after rallying 32 per cent from its April lows.
This robust uptrend – anchored by the 20-day Simple Moving Average (SMA) – now faces formidable resistance near the 22,000 to 22,222 zone, a level which has withstood four breakout attempts since December 2024. Investors are bracing for heightened volatility amid Middle-East tensions and as the Jul 9 end of US tariff deadline extension looms. Since April 2025, the 20-day SMA has consistently acted as dynamic support, propelling the index higher during each pullback.
This moving average is currently around 21,560. A pullback to below 21,300 likely indicates the breach of the support level, potentially triggering a slide towards the 76.4 per cent Fibonacci retracement level at 20,880. The 50-day SMA near 20,380 would then be the next support level to monitor if there is any short term pull back to the 76.4 per cent Fibonacci level.
The 22,000-22,222 barrier represents a triple technical threat: February 2025's all-time high, the 100 per cent Fibonacci retracement level, and a psychological milestone. Historical price action reveals this zone's significance – each prior rejection has triggered increasing selling pressure. A decisive close above 22,222 could unlock upside towards 22,800 and 23,250.
However, momentum indicators flash caution. The Relative Strength Index (RSI) shows bearish divergence, with lower highs from May to June despite the index's higher peaks in the same period. If the RSI continues to dip to below 50, it could signal a deeper pullback as we enter the third quarter of 2025.
The ongoing Israel-Iran hostilities continue to inject uncertainty into global equity markets. Any escalation threatening oil supply routes or energy infrastructure could reignite risk aversion.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The expiry of the US tariff suspension on Jul 9 presents a more immediate concern. The US and its major trading partners have yet to reach conclusive agreements. Market sentiment could improve if there is a further extension or progress in trade negotiations.
In addition to the upcoming US tariff extension deadline, several key developments may influence market direction. These include the US Federal Reserve's recent update of two anticipated rate cuts in 2025 as well as the upcoming earnings season for US mega-cap technology companies. Both could serve as catalysts for the NDX's performance.
The Nasdaq 100 Index stands at a crossroads. Its technical foundation remains solid, a strong bullish run for weeks, supported by the 20-day SMA. Yet the quadruple-top resistance at 22,000-22,222, fortified by bearish momentum divergence, deserves concern.
Investors should consider exposure near resistance, and position for various outcomes from the Jul 9 tariff decision. Whether the index surges towards new highs or revisits the 20,880 support zone will depend largely on how geopolitical tensions and trade policy uncertainties unfold in the weeks ahead.
The writer is manager, dealing & investor education, at PhillipCapital
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
Gold rises as investors seek safe havens amid Middle East conflict fears
[BENGALURU] Gold prices inched higher on Monday (Jun 23) as investors turned to safe-haven assets amid growing fears of a broader Middle East conflict, with markets closely watching for Iran's response to US attacks on its nuclear sites. Spot gold was up 0.1 per cent at US$3,371.30 an ounce, as at 0020 GMT. US gold futures were steady at US$3,387.20. The world braced on Sunday for Iran's response after the US attacked key Iranian nuclear sites, joining Israel in the biggest Western military action against the Islamic Republic since its 1979 revolution. In a televised address, US President Donald Trump warned Iran against retaliating, stating that any response would trigger further attacks unless Iran agreed to pursue peace. Tehran vowed retaliation, with missile exchanges between Iran and Israel continuing over the weekend. Israeli fighter jets struck military sites in western Iran, according to officials, while Iranian missiles wounded scores of people and flattened buildings in Tel Aviv. Meanwhile, the close split at the US Federal Reserve over whether to keep hedging against inflation risks or move forward faster with rate cuts came through on Friday in the first public comments from policymakers following a decision this week to hold borrowing costs steady for now. The Fed's latest Monetary Policy Report to Congress, released on Friday, said that US inflation remains somewhat elevated and the labour market is solid. However, it suggested that the full impact of Trump's tariffs is likely yet to be felt, reiterating the Fed's stance that it can wait for greater clarity before making policy moves. On Friday, Trump once again floated the idea of firing Fed chair Jerome Powell, whom he has long criticised for not lowering interest rates as much as he wants. Elsewhere, spot silver was up 0.1 per cent at US$36.03 per ounce, platinum fell 0.3 per cent to US$1,260.78, while palladium edged down 0.1 per cent to US$1,043. REUTERS
Business Times
2 hours ago
- Business Times
Japan's factory activity returns to growth after 11-month contraction: PMI
[TOKYO] Japan's manufacturing activity returned to growth in June after nearly a year of contraction, but demand conditions remain murky due to worries over US tariffs and the global economic outlook, a private-sector survey showed on Monday. Meanwhile, the service sector's expansion accelerated, pushing overall business activity to a four-month high, offering a counterbalance to the export-reliant factory sector amid diminished prospects for an early Japan-US trade deal. The au Jibun Bank flash Japan manufacturing purchasing managers' index (PMI) rose to 50.4 from May's final 49.4, ending 11 months of readings below the 50.0 threshold that indicate contraction. Among sub-indexes, factory output and stocks of purchases rebounded to growth from multi-month contraction, driving up the headline manufacturing PMI. However, new orders for manufactured goods, including from overseas customers, continued to decline, the survey showed. 'Companies indicated that US tariffs and lingering uncertainty over the global trade outlook continued to inhibit customer demand,' said Annabel Fiddes, economics associate director at S&P Global Market Intelligence, which compiled the survey. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Manufacturers' confidence about their year-ahead output remained mostly unchanged from May. By contrast, the au Jibun Bank flash services PMI increased to 51.5 in June from 51.0 in May, thanks to new business growth, although growth for export businesses slowed slightly. Combining both manufacturing and service activity, the au Jibun Bank flash Japan composite PMI rose to 51.4 in June from May's 50.2, reaching its highest level since February. Cost pressures across the private sector eased in June, with input prices rising at the slowest rate in 15 months, though output price inflation accelerated to a four-month high, the composite data showed. Employment was another bright spot, with workforce numbers increasing at the quickest pace in 11 months across both manufacturing and services sectors. REUTERS
Business Times
2 hours ago
- Business Times
Asia-Pacific markets fall after US strikes on Iran; oil prices surge, greenback strengthens
[SINGAPORE] Asia-Pacific markets declined in early trade on Monday (Jun 23) morning, as oil prices surged and the greenback reacted, after the US launched strikes against three nuclear facilities in Iran over the weekend. Japan's Nikkei 225 tumbled 0.69 per cent while South Korea's Kospi fell over 1 per cent. Australia's ASX was down around 0.3 per cent. Oil prices surged in early trade on Monday, with Brent and the main US crude contract WTI both climbing more than four per cent to hit their highest price since January before paring gains. Brent was last up 2.4 per cent at US$78.83 per barrel and WTI was up 2.5 per cent at US$75.66. Crude prices had already spiked last week after Israel attacked Iran. Brent has risen 13 per cent since the conflict began on Jun 3, while WTI has gained around 10 per cent, according to Reuters data on Monday. The US dollar index rose 0.3 per cent, strengthening slightly around 0.12 per cent to the Singapore dollar at around S$1.2884, after 8am Singapore time. On Saturday, US President Donald Trump announced strikes against three Iranian nuclear facilities, boosting Israel's efforts to destroy Iran's nuclear programme. This followed more than a week of Israeli air attacks on Iran's nuclear and military facilities and US attempts to persuade Iran to reach a deal to dismantle its nuclear programme. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A senior White House official said that the president decided to proceed with the strikes after becoming convinced that Tehran had no interest in reaching a nuclear agreement. In response, Iran on Sunday threatened US bases in the Middle East, intensifying concern of a deepening of conflict in the region. An adviser to Iran's supreme leader Ayatollah Ali Khamenei Ali said bases used by US forces could be attacked in retaliation given that the US 'has attacked the heart of the Islamic world and must await irreparable consequences'. He warned that countries in the region or elsewhere used by US forces to strike Iran would be considered legitimate targets for Iran's armed forces. Please check back for more updates.
