Nasdaq Composite Technical Analysis – Last line of defence for the Bulls | Forexlive

Last
week, the NFP missed
expectations for a second time in a row and the previous numbers were all
revised lower. This was seen as a disappointment as the labour market seems to
be a touch weaker than previously expected. Nonetheless, the unemployment rate
fell once again and lessened the disappointment from the miss in the payrolls
number. The worse part for the Fed is that the average hourly earnings beat
expectations, and such high wage growth is not consistent with a sustainable
return to the 2% target. It’s worth reminding though, that the Fed will see
another NFP report before the September meeting, so this NFP doesn’t change much,
but the data leading into the meeting can still weigh on sentiment.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite couldn’t extend the rally all the way into the key 14649 resistance.
In fact, we can see that we had a divergence with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. The price is now at a previous resistance turned support where we
should expect the buyers stepping in with a defined risk below the level to
target the 14649 high.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
support around the 13865 level where we can also find the 50% Fibonacci retracement level
for confluence. The
buyers are likely to enter here, but the sellers will want to wait for a break
below the level to pile in even more aggressively and extend the fall into the trendline or the
13174 support.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have two key levels now:

· The support at
13865 where a break below it should give the sellers control.

· The
resistance at 14115 where a break above it should give the buyers control.

The best strategy would be to wait for a
break on either side and then join the wave.

Upcoming
Events

This week the
main event will be the US CPI report on Thursday. The market has been loving
the disinflationary trend seen in the past months, so an upside surprise is
likely to weigh on risk sentiment and push the market lower. On the other hand,
another miss in the data should provide some relief and lead to a rally. After
the US CPI we will also see the latest US Jobless Claims report, which is less
likely to move the market since it’s released at the same time of the CPI, but
big surprises should have an effect, nonetheless. Finally, we conclude the week
with the University of Michigan Consumer Sentiment report on Friday where the
market is likely to focus more on the inflation expectations figures.