Last week the Fed kept interest rates unchanged as
expected while striking a hawkish tone via the Dot Plot. In fact, the Fed not
only sees another rate hike by the end of the year, but also much less rate
cuts by the end of 2024. Fed Chair Powell has also
admitted that the soft-landing scenario is not his base case at the moment and
stronger than expected economic data may require additional tightening. For
now, the economic data remains strong with Jobless Claims crushing
expectations last week, which is not what the Fed wants to see.
Nasdaq Composite
Technical Analysis – Daily Timeframe
On the daily chart, we can see that we had a big
selloff following the FOMC meeting and the Nasdaq Composite has now reached a
key support zone
around the 13174 level where we have the confluence with the
major trendline and the
38.2% Fibonacci retracement level.
This is where we can expect the buyers to step in with a defined risk below the
trendline to position for a rally into the highs.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the Nasdaq
Composite broke out of the bearish flag defined
by the minor counter-trendline, and fell all the way down to the support level.
The target for the pattern is generally the equal extension of the first leg
which stands roughly around the major trendline. At this point, the sellers
will want to see the price breaking below the trendline to pile in with even
more conviction and extend the fall into the 12274 support.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that in
case we get a bounce around the support or the trendline, the sellers will have
an opportunity to sell the pullback around the black trendline where they will
have the confluence with a previous swing level, the Fibonacci retracement levels
and the red 21 moving average. The
buyers, on the other hand, will want to see the price breaking above the trendline
to invalidate the bearish setup and position for a rally.
Upcoming
Events
This week is pretty bare on the data front with just a
couple of notable economic releases. Tomorrow, we will get the latest US
Consumer Confidence report while on Thursday we will see again the US Jobless
Claims data. On Friday, we conclude the week with the US PCE data.
This article was written by FL Contributors at www.forexlive.com.