After the strong selloff following the more hawkish than expected FOMC dot plot, the Nasdaq Composite is now taking a breather just around a key level. On the fundamental side nothing’s changed this week other than another very strong Jobless Claims report yesterday that points to a tight labour market, which is not what the Fed wants to see as it might put upward pressure on wage growth and make it harder to achieve the inflation target.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite pulled back into the support turned resistance and what happens next will be key for the market. This is where we can expect the sellers to start positioning more aggressively into the 12274 support, while the buyers will want to see a break to the upside to invalidate the bearish setup and target new highs.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely that the price is in a kind of a limbo. The red 21 moving average is likely to act as dynamic resistance if the price spikes higher, but overall we should see more upside if the Nasdaq Composite continues to trade above the resistance and more downside if it falls back below it.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has been diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got a pullback into the resistance zone where we can find the trendline and the 38.2% Fibonacci retracement level for confluence. This is where the sellers should step in with a defined risk above the trendline and target the 12274 support. The buyers, on the other hand, will want to see the price breaking above the trendline to pile in and target new highs.
Upcoming Events
Today the only notable release will be the US PCE report. The data is unlikely to change anything for the market unless we get some big surprises.
