Nasdaq Composite Technical Analysis

There is a recurring sentiment among many Federal Reserve members that they are awaiting further data before determining the extent of tightening measures. While the majority of them anticipates two additional rate hikes this year, they consistently emphasize that these decisions depend on the data. Yesterday, Fed Chair Powell highlighted the resilience of the economy and expressed openness to the possibility of two consecutive rate hikes should the labour market's strength persist. The data received after the last FOMC meeting serves to reinforce the notion that we are likely to see further rate hikes. The housing market data surpassed expectations, the US Jobless Claims remain steady, the US Services PMI continues to expand, and the latest Consumer Confidence report showed notable strength. Naturally, the upcoming NFP and CPI reports will have a pivotal role, however, if we continue to see such positive data, it is highly likely that the Fed will increase rates twice instead of the market's current expectation of a single rate hike in July. Nasdaq Composite Technical Analysis – Daily Timeframe On the daily chart, we can see that the price has bounced on the red 21 moving average and extended to the 13651 level. From a risk management perspective, the buyers would be better off buying from the 13174 support where we can also find the 38.2% Fibonacci retracement level. If we see an extension lower, the last line of defence will be the upward trendline. The sellers, on the other hand, are likely to pile in at every break lower. Nasdaq Composite Technical Analysis – 4 hour Timeframe On the 4 hour chart, we can see that the moving averages have crossed to the downside. We haven’t seen such a development since the beginning of May, so it clearly shows that the bearish momentum is prevailing or the bullish one is waning. In any case, we can expect the sellers to lean on the red 21 moving average and target the 13174 support, while the buyers will need to break decisively to the upside to invalidate the bearish setup. Nasdaq Composite Technical Analysis – 1 hour Timeframe On the 1 hour chart, we can see that we have a strong short term resistance zone at the 13630 level where we can also find the 50% Fibonacci retracement level. This is where the sellers should pile in with a defined risk above the resistance and target the support. The buyers, on the other hand, will want to see the price breaking higher to jump onboard and target a new high. Upcoming risk events include today's US Jobless Claims and tomorrow's US PCE report. The market has consistently responded favourably to positive labour market data and low inflation reports, so we can expect a similar reaction if we get such results. Conversely, if the data labour market data weakens, it could potentially trigger concerns about a recession and lead to a decline. This article was written by FL Contributors at www.forexlive.com.
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