Last Friday, the NFP report massively beat forecasts with 336K jobs added against 170K expected. The unemployment rate remained unchanged at 3.8% and average hourly earnings were a touch lower. Overall, the market viewed it as a good release with the soft-landing narrative prevailing. Over the weekend, Hamas launched a big attack against Israel which might cause some risk aversion in the markets, although it's likely to be short-lived as long as the conflict remains in the Levant.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite eventually rallied strongly from the trendline and the 38.2% Fibonacci retracement level following the strong NFP report. The buyers might now be in control and the target should be the downward trendline around the 13800 level. The sellers, on the other hand, will need the rally to fail completely and the price to get back below the 13174 support to increase the bearish momentum and take the Nasdaq Composite to new lows.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely that the Nasdaq Composite broke out of the consolidation around the support zone as the price breached the resistance defined by the 38.2% Fibonacci retracement level. The buyers are likely to pile in with more conviction now targeting the 13800 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had a divergence with the MACD right into the strong support zone which is generally a sign of weakening momentum often followed by pullbacks or reversals. The Nasdaq Composite might open lower today following the events over the weekend, but the buyers should take that as a dip-buying opportunity and pile in around the resistance turned support with a defined risk below the most recent swing low. The sellers, on the other hand, will want to see the price breaking lower to start positioning for further downside and break of the most recent low.
Upcoming Events
This week we have some important inflation reports. On Wednesday, we will get the US PPI data and later in the day the FOMC Meeting Minutes. On Thursday, it will be the time for the main release of the week, that is the US CPI report, and at the same time we will see the latest Jobless Claims figures. Finally, on Friday we will get the University of Michigan Consumer Sentiment report.