Fundamental Overview
The Nasdaq Composite maintained its upward trajectory following lower than expected US inflation figures and strong US activity data. This positive growth impulse without concerning inflation developments (as of now) is keeping the upside intact given the lack of bearish drivers.
Looking ahead, we have the August 1 tariff deadline that might keep the markets more on the defensive, but it certainly wouldn't be the first time that Trump postpones a deadline or tones down his threats. So, the probabilities are more skewed for positive outcomes.
The risks ahead include another growth scare from tariffs or a more hawkish repricing in interest rates expectations. In the bigger picture though, given that the Fed's reaction function remains to either wait more or cut, the market should eventually get back to its upward trend.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite has been printing all-time highs consistently given the lack of bearish drivers. From a risk management perspective, the buyers will have a better risk to reward setup around the previous all-time high at 20,202 where we can also find a trendline for confluence. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 19,200 level next.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is trading inside a rising channel. The buyers continue to lean on the lower bound of the channel to keep pushing into new highs, while the sellers are leaning on the upper bound to position for a breakout to the downside and a deeper pullback into the 20,202 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will continue to lean on the lower bound to target new highs, while the sellers will look for a break lower to open the door for a bigger pullback.
Upcoming Catalysts
Tomorrow we get the latest US Jobless Claims figures and the Flash US PMIs.
