Last Friday, the Nasdaq Composite finished the day positive as the US PCE report came mostly in line with expectations. The market has already priced out almost all the rate cuts that were expected at the beginning of the year and it’s now expecting just one in September or December. This means that we will need more worrying data to start pricing in a rate hike and put more downward pressure on the market. For now, the dip-buyers are again in control as we continue to erase the losses from the beginning of the month.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite reached a key resistance zone around the 15929 level where we can also find the confluence of the 50% Fibonacci retracement level and the red 21 moving average. This is where the sellers will likely step in with a defined risk above the moving average to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and increase the bullish bets into a new all-time high.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price got a bit overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move. In this case, it would also fit with the bearish setup as we might see at least a rejection from the resistance zone.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price action into the resistance level might have formed a bearish flag, but we will need to see the price breaking the bottom trendline to confirm it. In case of a breakout to the downside, the measured target would stand around the 14700 level.
Upcoming Events
Tomorrow, we have the US Q1 Employment Cost Index and the Consumer Confidence report. On Wednesday, we get the US ADP, the ISM Manufacturing PMI, the Job Openings and the FOMC rate decision. On Thursday, we will see the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP and ISM Services PMI.
