Nasdaq Technical Analysis | Forexlive
On the daily chart below for the
Nasdaq, we can see that the market keeps on trying to break above the key 12274
resistance level but till now without much
success. The strong NFP report on Friday gave the market
soft landing vibes due to an expected moderation in inflation, a resilient
labour market and a Fed expected to pause in June and cut interest rates by the
end of the year. The buyers are still targeting the 13000 level, which is the
extension of the big bullish
flag created in February.
On the 4 hour chart below, we can
see that the market has been stuck in a range for over a month just beneath the
key resistance, with just one failed probe near the end of April. It’s been
hard for both buyers and sellers to have conviction on what’s next, that’s why
the data keeps causing such big movements.
On one hand the market looks
forward to the soft landing scenario where the labour market remains healthy
and inflation returns back to target, on the other hand the market sees a hard
landing where either inflation remains high and the Fed is forced to do more or
the labour market deteriorates as the monetary policy lags start to have their
effects.
On the 1 hour chart below, we can
see more closely the range between the 12274 resistance and the 11900 support.
There’s not much a trader can do here than just waiting for a clear breakout on
either side and go with the flow. Alternatively, one can “play the range” by
selling at resistance and buying at support. This week we have the US CPI report on Wednesday and it’s
likely that a beat on expectations would cause a selloff, while a miss would
give us a rally.