the board in the US CPI report, the market is increasingly confident
that we are heading towards a soft landing. Such expectations are also supported
by the strong labour market, as we confirmed again by the US Jobless Claims last Thursday, and the rising
consumer sentiment, as seen in the University of Michigan report last Friday. As long as the
labour market continues to hold, we are likely to see new highs for the Nasdaq
Composite.
Nasdaq Composite Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the buyers kept
leaning on the red 21 moving average to
position for more upside and eventually succeeded as the US CPI missed
expectations and led to a strong rally. The Nasdaq Composite should now be
eyeing the 14649 level where we should see strong sellers stepping in.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the Nasdaq
Composite broke out of an ascending triangle patter.
Generally, a breakout on either side leads to strong momentum in the direction
of the breakout, so the buyers have also this factor stacked in their favour.
At the moment we are seeing a pullback from overstretched levels as the price
was too far from the blue 8 moving average, and in such instances, we can generally
see some consolidation or a pullback into the moving average before another
strong move.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we
have two possible levels where the buyers may lean on to:
- The 38.2% Fibonacci
retracement level near the 14000 level. - The 61.8% Fibonacci retracement level near
the previous resistance now
turned support.
The sellers, on the other hand, should
wait for the price to break below the 13800 level before piling in and extend
the fall into the 13174 support.
Upcoming
Events
This week there are only two notable events: the US
Retail Sales tomorrow and the US Jobless Claims on Thursday. Given the
sentiment in the markets, we are likely to see a big selloff only if the data
misses expectations by a big margin as a little miss should just be an
opportunity to buy the dip. Conversely, higher than expected data should
reinforce the soft-landing narrative and lead to new highs.
This article was written by FL Contributors at www.forexlive.com.