As the blackout period concluded after the FOMC meeting, we heard from numerous Federal Reserve members last week. The sentiment remains the same: exercising caution and awaiting data to determine the extent of further rate increases. Although the majority foresees two more rate hikes this year, they consistently emphasize that such decision will be subject to the data.
The data we saw last week points more towards a rate hike, driven by upside surprises in the housing market data, good US Jobless Claims figures, and strong US Services PMI. Of course, the next NFP and CPI reports will significantly influence the market pricing, however, if we keep getting good reports, it’s likely that the Fed will raise rates in July as the market currently expects.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite, as the other indices, is currently retreating after a strong rally seen in the past months. The natural support level looks to be the one at 13174 where we can also find the 38.2% Fibonacci retracement level and the red 21 moving average. That’s where the buyers should pile in with a defined risk below and target a new high. The sellers, on the other hand, should enter at every break lower as they don’t have a resistance zone where they can lean on to at the moment.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the moving averages on this timeframe are starting to converge and we may get a crossover soon if the price keeps falling. We haven’t seen a crossover since the last May, so the sellers may take it as a further signal of a possible change in the general trend. Anyway, a break below the 13174 support zone will be key for the sellers.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the moving averages are crossed to the downside and the price has been printing lower lows and lower highs. A break below the current floor at 13445 would open the door for further downside into the 13174 support. The buyers may also pile in in case the moving averages cross to the upside and the price makes a new higher high.
On the data front, this week appears even quieter compared to the previous one, with only the US Jobless Claims and the US PCE scheduled for the end of the week. Anyway, we will hear from several Federal Reserve members once again. However, since we have yet to see any significant economic indicators like the NFP and CPI, it is unlikely that they will provide signals regarding the next course of action at this moment.