On the daily chart below for the Nasdaq, we can
see that the market consolidated just below the key 12274 resistance. The moving
averages are still crossed to the upside keeping the bullish trend intact, but
they are starting to converge as the rangebound price action has been going on
for almost a month now.

The latest economic data are not
supportive for the bulls as the US
Retail Sales missed expectations across the board and the Jobless
Claims keep showing increases week after week. Today the market will focus on
the US PMIs and if those miss expectations
as well, then we may see the trend turning around.

Nasdaq
technical analysis

On the 4 hour chart below, we can
see more closely the consolidation below the key resistance. The moving
averages on this timeframe have crossed to the downside, although they are not
a reliable signal in a range.

The market is still uncertain
where to go next, so the economic data will be very important. The buyers will
need to see benign data, while the sellers will want to see more deterioration.

On the 1 hour chart below, we can
see the clear range created just below the key resistance. Generally, it’s best
to sit out when the market starts ranging and wait for a clear breakout
supported by a fundamental catalyst. Today we have the US PMIs so we may have a
catalyst, but the price will also need to break on either side before the
buyers and sellers can join.

A miss in the data with the price
breaking lower would give the sellers conviction to pile in and target the
swing low at 11650. A beat and the price breaking above the top of the range
will give the buyers conviction to jump onboard and target the next resistance
at 13100.

This article was written by ForexLive at www.forexlive.com.