The fears around a larger conflict in the Middle East eased at the start of the week as Israel didn’t proceed with a ground offensive in Gaza over the weekend and there were ongoing talks for a more diplomatic resolution. On late Tuesday though, a hospital in Gaza got bombed killing hundreds of people and sparking a global outrage.
It’s not yet clear who is responsible for the bombing as Israel and Hamas trade blame as reported on Bloomberg with Hamas blaming Israeli airstrikes and Israel saying that it was a failed rocket launch by the Palestinian Islamic Jihad group. Following this unfortunate episode though, Jordan cancelled the summit that was scheduled between the US President Biden, the Palestinian President Abbas and the Egyptian President al-Sisi in Amman.
On the domestic side, the US Retail Sales yesterday beat expectations by a big margin with positive revisions to the prior figures. Following the release, Treasury yields skyrocketed across the board as the market is starting to come to the idea that rates will be indeed held higher for longer. It also shows that the US consumers remain resilient and with the ongoing disinflation the market is likely to see it as a good thing for the soft-landing narrative.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite is consolidating around the upward trendline and the red 21 moving average keeping the bullish bias intact. The target for the buyers should be the top trendline around the 13800 level with an eventual breakout likely triggering a bigger rally into the cycle highs.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the bounce on the support around the 13365 level where we have the confluence with the red 21 moving average and the 50% Fibonacci retracement level. The sellers will need to break that support to switch the bias from bullish to bearish and start targeting new lows.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a resistance zone around the 13600 level where the price got rejected from multiple times. A break above this resistance should see more buyers piling in and target the top trendline around the 13800 level, ultimately eyeing a breakout. The sellers, on the other hand, might keep on leaning on the resistance as long as it holds, although they would have a much better risk to reward opportunity at the top trendline.
Upcoming Events
Tomorrow we will get the latest US Jobless Claims report and the market will want to see if the miss in Continuing Claims last week was just a blip or the start of a trend. Later in the day we will also hear from Fed Chair Powell where the market will be focused on any hint about the near-term policy outlook.