Last week, the market remained under pressure as the more hawkish than expected FOMC dot plot was still fresh in everyone's mind. The economic data continues to support the soft-landing narrative with Jobless Claims showing a solid labour market and Core PCE trending downwards. The last day of the week, we got a small bounce across the board as the market took a breather after the heavy selloff after the FOMC meeting. We will see if it was just a pullback or the start of a new rally.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite rallied back above the key support formed by the trendline and the 38.2% Fibonacci retracement level. Is this just a pullback and we’ll another selloff or the market is turning around? The buyers are likely to keep piling in around here with a defined risk below the support, while the sellers will want to see the price breaking lower again to jump onboard and ride the fall into the 12274 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the bounce back above the support got rejected at the red 21 moving average and the 38.2% Fibonacci retracement level. This is the resistance that the buyers will need to break to start targeting the downward trendline around the 13800 level. The sellers, on the other hand, will keep on leaning on the moving average to position for further downside.
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, the price broke above the trendline, and the moving averages crossed to the upside, which might be an early signal of a reversal. The buyers should pile in here with a defined risk below the support to position for a rally into the downward trendline around the 13800 level. The sellers, on the other hand, will want to see the price breaking below the support again to pile in and ride the selloff into the 12274 level.
Upcoming Events
This week we have many key economic releases that will culminate in the NFP report on Friday. Today, we will see the latest ISM Manufacturing PMI. Tomorrow, we will have the Job Openings data which led to a strong rally the last time as the big miss was interpreted as a good thing due to less labour market tightness and less hawkish Fed. On Wednesday, it will be the time for the ADP report and the ISM Services PMI. On Thursday, we will see the Jobless Claims data, which continues to show a solid labour market. Finally on Friday, it will be the time for the NFP report which is the only one the Fed will see before its next rate decision.
