Last Friday, the Nasdaq Composite ended the day positive following the US NFP report. In fact, the data beat expectations across the board showing once again that the labour market remains resilient without too much inflationary pressure as wage growth continues to ease. The focus will now switch towards the US CPI data on Wednesday as a hot report could change the Fed's strategy in the near term and delay the rate cuts further.
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 now and we will likely need to wait for the US CPI report on Wednesday to decide where to go next.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price last Friday rallied following the goldilocks NFP report and it’s now trading back above 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 4th of April. We can also notice that the latest leg lower diverged with the MACD, which might give the buyers some more conviction for further upside. In fact, if the price were to break above the counter-trendline, we can expect the buyers to increase the bullish bets into new highs, while the sellers will likely lean on the trendline to position for a drop into new lows with a better risk to reward setup.
Upcoming Events
This week is going to be a bit more tranquil on the data front with the US CPI being the main highlight. On Wednesday, we have the US CPI report which will likely decide if the Fed is going to delay rate cuts further. On Thursday, 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.
