the Nasdaq Composite sold off following a hot US CPI report
that sent Treasury yields and the US Dollar higher as the market priced out
rate cuts further. The most frightening part was that the Fed Chair Powell’s
preferred measure, the Core Services ex-Housing, jumped by 0.85% M/M which was
the biggest increase since April 2022. The market might even look past this
report as the Fed is not expected to restart hiking rates anyway, but it should
start getting harder and harder for the bulls to keep the conviction at these
levels.
Nasdaq Composite Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite
yesterday fell into the key trendline where we
have also the red 21 moving average for confluence. This is
where we can expect the buyers to step in with a defined risk below the
trendline to position for another rally into the all-time high. The sellers, on
the other hand, will want to see the price breaking lower to invalidate the
bullish setup and position for a drop into the 15150 support.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that besides the
trendline and the moving average, we have also the 50% Fibonacci retracement level
standing around the 15635 support. This gives the buyers another layer of
confluence. What happens here will likely decide where the market will go in
the next few weeks as a strong bounce should lead to a rally into the all-time
high, while a break lower will likely trigger a selloff into the 15150 level.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the
buyers will need to break above the most recent swing high at 15765 to confirm
the rally into the all-time high. If the price fails and falls back into the
trendline, the chances of a downside breakout will increase.
Upcoming
Events
Tomorrow we will see latest US Jobless Claims figures
and the US Retail Sales. On Friday, we conclude the week with the US PPI data
and the University of Michigan Consumer Sentiment survey.
This article was written by FL Contributors at www.forexlive.com.