Nasdaq Composite Technical Analysis | Forexlive

Last Friday, the NFP report
beat expectations across the board with the unemployment rate falling to 3.7%
vs. 3.9% previously and the average hourly earnings on a monthly basis higher
than expected at 0.4%. The jobs data was followed by a strong University of Michigan Consumer
Sentiment survey where inflation expectations fell much more than expected.

Overall, it was a good day for those in the
soft-landing camp, but it also raised the risk of a hawkish FOMC rate decision
on Wednesday as the Fed might push against rate cuts expectations more
strongly. The Nasdaq Composite continues to consolidate at the highs as there
might not be that much of an incentive to keep pushing ahead of this week’s
risk events.

Nasdaq Composite Technical Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
rallied back to 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 zone
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 another bearish confluence for the
sellers with the first target standing around the recent lows at 14050. The
buyers, on the other hand, will want to break decisively higher to invalidate
the bearish setup and extend to new highs.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the rangebound price action between the cycle high and the minor
support around the 14050 level. This range will likely be key now as a break to
the upside should lead to a rally while a break to the downside should trigger
a selloff into 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 tomorrow with the release of the
US CPI report where the market will want to see how the disinflationary trend
is going. On Wednesday, 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.