Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Nasdaq Composite finished another day
basically flat as the market continues to consolidate ahead of the US CPI
report. As previously mentioned, another hot report could change the near-term
Fed’s strategy and trigger a hawkish reaction putting more pressure on the
stock market. On the other hand, data in line with expectations or even lower
will likely lead to a positive risk sentiment driving the market to new highs.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite has
been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price recently broke out of the rising wedge which
opened the door for a bigger correction into the 14477 level. The price has
been consolidating around the highs for quite some time as the market
participants await the US CPI report today to decide where to go next.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price has been hovering around the critical 16206 level. If the price were
to continue lower and fall below the 16206 level again, we can expect the
sellers to pile in more aggressively to extend the drop into the first support level
at 15929. That’s also where we can expect the buyers to step in with a defined
risk below the support to position for a rally back into a new all-time high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the price getting rejected several times
from the black counter-trendline except
the fakeout on the 4^th of April. The price is probing above the
counter-trendline again although this should be discounted as just noise ahead
of the US CPI release. A break above the 16350 level will see the buyers piling
in more aggressively to extend the rally into a new all-time high. Conversely,
a break below the 61.8% Fibonacci
retracement level will likely trigger a selloff into
the 15929 support.

Upcoming
Events

Today we have the US CPI report which will likely
decide if the Fed is going to delay rate cuts further. Tomorrow, we get the US
PPI and the latest US Jobless Claims figures. Finally, on Friday we conclude
the week with the University of Michigan Consumer Sentiment survey.