Fundamental Overview
We had some good news last week when both the CPI and the PPI came in on the soft side. This should help the stock market in the bigger picture since it will give the Fed more confidence to begin decreasing rates in the latter part of the year.
The FOMC decision last week was slightly more hawkish than expected, but Fed Chair Powell made it clear that their estimates are subject to change as they are still very data dependent, so the market looked past the Fed's projections.
The risk sentiment remains a bit murky, but it appears that the negative mood of the prior week is dissipating. We have US Retail Sales data today, and good data should bolster the market and improve the risk sentiment.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq keeps making all-time highs as the path of least resistance remains to the upside. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline where they will also find the confluence of the 61.8% Fibonacci retracement level. At the moment though, it’s unlikely that we will see such a big pullback unless we get some really ugly US data.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a good support zone around the 19800 level where we can find the confluence of a minor trendline and the 38.2% Fibonacci retracement level. If the price gets there, we can expect the buyers to lean on the trendline with a defined risk below it to position for another rally with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 19000 level next.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have the lower bound of the average daily range for today right around the recent resistance now turned support. If we get a dip into it on weak US Retail Sales data, the buyers might step in around there to fade the reaction and position for new highs.
Upcoming Catalysts
Today we have the US Retail Sales and US Industrial Production. On Thursday, we get the US Housing Starts, Building Permits data and the latest US Jobless Claims figures. On Friday, we conclude the week with the and US PMIs.
