Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Nasdaq Composite held into last
Friday’s gains as the market continues to see a soft landing ahead where
inflation falls to target with stable growth and without a significant rise in
unemployment. For now, the data supports such thesis but there are still
monetary policy lags that need to filter through the economy in the next months
and the Fed might not be able to engineer a soft landing as they would need to
time perfectly the rate cuts which is unlikely to see. All eyes now will be on
the US CPI report today and the FOMC rate decision tomorrow.

Nasdaq Composite Technical Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
recently bounced on the red 21 moving average and
extended the rally back into the cycle high following the strong economic data
last Friday which supported the soft-landing narrative. The sellers are likely
to step in here with a defined risk above the cycle high to position for a drop
into the 13700 support where we
can also find the 38.2% Fibonacci retracement level
for confluence.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD into the
cycle high. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. This might be a signal that we could get a selloff
right from the cycle high, so the buyers might want to be extra careful going
forward. Nevertheless, a break above the cycle high could lead to more buying
momentum and new higher highs, so the buyers might want to keep playing the
upside.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the tentative price action into the cycle high. What happens here might
decide where the Nasdaq Composite will go in the next few weeks as a break to
the upside should lead to more highs, while a strong rejection to the downside
is likely to trigger a selloff into the 14050 level first and upon a further
break lower, the 13700 support.

Upcoming
Events

This week is going to be a big one with the US CPI and
the FOMC rate decision on the agenda. We begin today with the release of the US
CPI report where the market will want to see how the disinflationary trend is
going. Tomorrow, we have the US PPI data followed by the FOMC rate decision
where the Fed is expected to keep interest rates unchanged. On Thursday, we
will see the US Retail Sales and Jobless Claims figures, while on Friday we
conclude the week with the US PMIs.