Despite market closures in Hong Kong, Japan, and China for public holidays today (5 May), global markets saw notable moves during the Asian session.
Following the S&P 500 ’s nine-day winning streak—its longest since 2004—US stock index futures opened weaker. As of this writing, the S&P 500 and Nasdaq 100 E-mini futures are down 0.7% intraday.
The current weakness seen in the US stock index futures has been accompanied by a revival of US dollar weakness after the US Dollar Index failed to break above its 20-day moving average, which is acting as a key intermediate resistance at around 100.15 in the past three sessions.
The FX market is being spooked with the possibility that Japan may start to dump a portion of its massive US Treasury bonds holdings after Japan Finance Minister Kato mentioned in a media interview last Friday, 2 May, that Japan’s US Treasuries holdings could be used as a negotiation card in US-Japan trade negotiation talks which is being seen as a negative narrative on the US dollar.
Even though Japan Finance Minister Kato retraced his earlier comments about using US Treasuries as a negotiation tool on Sunday, the US dollar has continued to display weakness in today’s Asian session as it declined against the NZD (-0.8%), JPY (-0.7%), and AUD (-0.5%) at this time of writing.
Oil gapped down in today’s Asian opening session by 5%, where the West Texas crude oil traded to a current intraday low of US$55.81/barrel, just a whisker away from its key 9 April low of 55.23/barrel in light of more supplies from the Middle East coupled with the prospect of weakening oil demand due to US trade tariffs uncertainty.
OPEC+ has decided at a meeting last Saturday, 3 May, to increase the cartel production hike of more than 400,000 barrels a day from June, which matched a similar increase last month.
Economic Data Releases
Fig 1: Key data for today’s Asian mid-session
Chart of the Day – Potential Bearish Reversal for Nasdaq 100 at 200-day MA
Fig 2: US Nasdaq 100 CFD Index minor trend as of 5 May 2025
Since 22 April 2025, the price actions of the US Nasdaq 100 CFD Index (a proxy of the Nasdaq 100 futures) have evolved into a potential “Ascending Wedge” bearish reversal configuration
Last Friday’s price movement has hit the upper limit of the “Ascending Wedge,” and to key 200-day moving average coupled with a bearish divergence condition being flashed out on its hourly RSI momentum indicator at its overbought region.
Hence, these observations suggest that the 4-week up move of the US Nasdaq 100 CFD Index from its 7 April low may have reached an exhaustion point where the ongoing rally may roll over into a potential bearish reversal sequence.
Watch the 20,250/20,390 key medium-term pivotal resistance zone, and a break below 19,600 near-term support (also the lower limit of the “Ascending Wedge” may see further potential weakness towards the next intermediate support zone of 19,020/18,770 (also the 20-day moving average) (see Fig 2).
On the flip side, a clearance above 20,390 invalidates the bearish scenario for a continuation of the recovery for the next intermediate resistances to come in at 20,630 and 21,055.
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