Yesterday, the Fed left interest rates unchanged as expected with basically no change to the policy statement. Fed Chair Powell repeated once again that they are “proceeding carefully” as the full effects of the policy tightening have yet to be felt.
There were some expectations for him to hint or signal something for the December meeting given that the September Dot Plot showed another rate hike by the end of the year, but Powell instead said that they “have not made any decisions on future meetings” sparking a rally in the Nasdaq Composite.
On the data front, yesterday the US Job Openings beat expectations, but the ISM Manufacturing PMI missed by a big margin. The market might be taking this as good news for a relief rally in the short term, but the bulls may want to be careful going forward.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite eventually broke above the bottom trendline and extended the rally into new highs. The price is now approaching a key resistance zone around the 13174 level where we can also find the 50% Fibonacci retracement level and the red 21 moving average for confluence. This is where we can expect the sellers to step in with a defined risk above the level to position for a selloff into new lows.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the breakout of the resistance around the 12830 level where we had a strong confluence of the minor downward trendline, the broken bottom trendline and the previous swing level. The buyers will now need the price to break above the 13174 resistance to increase the bullish bets into the major trendline around the 13400 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see the key resistance around the 13174 level marked with a blue box. In case we get a pullback, the buyers are likely to lean on the minor upward trendline and the red 21 moving average to position for a breakout with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and pile in for a drop into new lows.
Upcoming Events
Today, we have only the US Jobless Claims data, which will be important for the market given the recent weakness in Continuing Claims. Tomorrow, we conclude the week with the US NFP report and the ISM Services PMI.