the Nasdaq Composite finished the day negative as we got a huge selloff late in
the day. The catalyst was attributed to the news of a possible Israel-Iran conflict which triggered risk off flows and the algos did
the rest to exacerbate the move. If that’s really the case, the market will not
want to be long risk into the weekend, so we might see some more weakness today
or at least a consolidation. A lot will also depend on the US NFP report today as
strong data across the board, especially on the wage growth side, could put
even more pressure on the price heading into the US CPI next Wednesday.
Nasdaq Composite Technical
Analysis – Daily Timeframe
On the
daily chart, we can see that the Nasdaq Composite 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 price recently broke out of the rising wedge and after
a brief bounce on the key 16206 level where we had the red 21 moving average for confluence, the
market sold off yesterday falling below the critical level. The technicals have
now turned bearish.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the
price bounced on the 16206 level where we had also the 61.8% Fibonacci
retracement level for confluence and eventually
reversed and fell into new lows. The target should now be the 15929 level where
the buyers will likely step in with a defined risk below the level to position
for a rally back into new highs. The sellers, on the other hand, will want to
see the price breaking lower to increase the bearish bets into the next support
at 15453.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more
closely the recent price action with the strong bounce on the key 16206 support zone
and then the complete reversal yesterday into the close. The catalyst for the
selloff was attributed to the news of a possible Israel-Iran conflict, which
triggered risk off flows. There’s not much else to glean from this chart and
the market will look forward to the US NFP report today for the next move.
This article was written by FL Contributors at www.forexlive.com.