such as a higher unemployment rate and lower average weekly hours, the recent
release of the NFP data has had minimal impact on the Nasdaq
Composite. The labour market has exhibited resilience, albeit with some
looseness, which could potentially result in lower inflation without causing
severe harm to the economy.
Furthermore, the
underperformance of the ISM Services PMI has not affected the market
significantly. Instead, speculation has arisen from the sub-index indicating
lower prices paid, suggesting the possibility of decreased core inflation
without substantial damage.
The market cautiously
considered the significant miss in Jobless Claims, taking into account the impact of
seasonal adjustments, while also acknowledging the improvements seen in
Continuing Claims. Overall, the market chose to emphasize the positive aspects
of the data rather than dwell on the negatives.
Nasdaq Composite Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq
Composite started to struggle a lot just above the key 13174 swing level. The
index has been curiously underperforming its peers recently prompting some
speculation that we may be peaking. It had a great run since breaking out of
the bullish flag back in
March, but the good news are getting exhausted and we are entering a period
where the data is expected to show either a deterioration in the economy or a
stickier inflation.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that if were to get
a pullback, the nearest support zone is
at the upward trendline where we
can also find a previous swing support and the 61.8% Fibonacci retracement level.
From a risk management perspective, that’s the best level where the buyers can
re-enter the market with a defined risk just below the support zone.
The sellers, on the other hand, are probably
already piling in here to target the trendline and a possible breakout, while
more conservative sellers may be waiting for a break of the trendline first
before jumping onboard to target the 12274 support.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we’ve
been diverging with
the MACD right
at this resistance level. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. The fact that we are seeing it here makes
it more significant. A break below the minor upward trendline would give the
sellers even more conviction for a fall into the major upward trendline where
we are likely to find the buyers fighting for more upside.
This week holds a series of significant events for the Nasdaq
Composite. It all starts with the eagerly awaited US CPI report scheduled for
tomorrow. This report is anticipated to have a crucial influence on shaping the
market’s expectations for the upcoming FOMC rate decision, which is scheduled
for the following day. Additionally, later in the week, we can expect another
Jobless Claims report and the release of the University of Michigan consumer
sentiment survey. The previous release of this survey had a notable impact on
the market, primarily driven by a substantial surge in long-term inflation
expectations.
This article was written by ForexLive at www.forexlive.com.