the Nasdaq Composite retreated a bit after the strong rally following the miss
in the ISM
Manufacturing PMI last Friday. There might be some profit taking
going on as we finally made a new all-time high and we have lots of risk events
ahead with the US labour market data and Fed Chair Powell testifying to
Congress. The path of least resistance remains to the upside until we either
see growth deteriorating or the economic data makes the market to expect the
Fed to make a U-turn on rate cuts.
Nasdaq Composite Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq
Composite extended the rally into a new all-time high last Friday. The price
started to retreat yesterday as the sellers stepped in with a defined risk
above the high to position for a drop into the key trendline
targeting a break below it. The buyers, on the other hand, will want to wait
for the price to reach the trendline to position for a rally into new highs
with a better risk to reward setup.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that
the price has been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. The pullbacks in this case resolved all into the
trendline, so we can expect the price to do the same in the next few days. We
can also notice that we might have formed a rising wedge, so it
will be important for the buyers to avoid a break below the bottom trendline because
it could trigger a selloff into the base of the wedge at 14477.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we
have now a resistance turned
support around the 16130 level where we have also the 50% Fibonacci
retracement level and the red 21 moving average for confluence. The
buyers might want to split their position in half between the support and the
trendline as the price can bounce on either level before continuing higher. The
sellers, on the other hand, will want to see the price breaking below the
bottom trendline to invalidate the bullish setup and increase the bearish bets
into new lows.
Upcoming
Events
This week we have lots of important events on the agenda
with the release of the US labour market data and the Fed Chair Powell
testifying to Congress. We begin today with the US ISM Services PMI. Tomorrow,
we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. On
Thursday, we get the latest US Jobless Claims figures, while on Friday we
conclude the week with the US NFP report.
This article was written by FL Contributors at www.forexlive.com.