Fundamental Overview
The Nasdaq bounced strongly from the lows last week following the good US Jobless Claims figures as the data quelled some of the fears around the labour market after the weak US NFP report.
That’s been also evident from the market pricing for rate cuts as expectations for a 50 bps cut in September kept on being pared back with now a 25 bps move seen as more likely.
All of the above contributed to a more positive risk sentiment in the market with the focus now on the US CPI report tomorrow where benign figures will likely give the bulls some more support.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq is approaching a key downward trendline around the 19000 level. That’s where we can expect the sellers to step in with a defined risk above the trendline to position for a drop back into the lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently broke above a strong resistance zone around the 18500 level and increased the gains as more buyers piled in. We can also see that we now have an upward minor trendline defining the current bullish momentum.
If we were to get a pullback into the 18500 zone and the trendline, we can expect the buyers to step in with a defined risk below the trendline to position for a break above the major trendline with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bearish bets into new lows.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action which has been quite tentative as we head into the US CPI report tomorrow. There’s not much else to glean from this timeframe as the market participants will wait for a catalyst or the price to reach the key levels. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US PPI data. Tomorrow, we have the US CPI report. On Thursday, we get the US Retail Sales and Jobless Claims figures. Finally, on Friday, we conclude the week with the University of Michigan Consumer Sentiment survey.
