Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Fed left interest rates unchanged as
expected with basically no change to the statement. The market was fearing some
hawkish stuff, but we didn’t get any. In fact, the Dot Plot showed still three
rate cuts for this year and the economic projections were all upgraded with
growth and inflation higher and the unemployment rate lower. Moreover, during
the press conference, Fed Chair Powell didn’t
sound hawkish, on the contrary, he was fairly neutral. This gave the Nasdaq
Composite the green light for a rally as the risk sentiment turned very
bullish.

Nasdaq Composite Technical
Analysis – Daily Timeframe

Nasdaq Composite Daily

On the daily chart, we can see that the Nasdaq
Composite yesterday finally managed to break through the key 16206 resistance
following the Fed decision. The buyers will now likely keep piling in targeting
the top trendline around
the 16700 level. The sellers, on the other hand, should wait for a change in
risk sentiment and a breakout to the downside before considering new positions.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

Nasdaq Composite 4 hour

On the 4 hour chart, we can see that
the price has been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. We continue to trade inside the rising wedge, so if
the price were to break below the trendline, the sellers will have much more
conviction to look for new lows with the base of the wedge at 14477 being the
ultimate target. For now, the buyers remain in control and the target for the
rally should be the top trendline.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

Nasdaq Composite 1 hour

On the 1 hour chart, we can see more
closely the breakout of the resistance. From a risk management perspective, the
buyers will have a much better risk to reward setup around the trendline where
they will also find the resistance turned
support and the red 21 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a break below the major trendline with a better risk to reward
setup.