The US NFP report last Friday hasn’t changed much the market expectations for the upcoming FOMC rate decision as the data showed a solid labour market despite the first miss on the headline number after 14 consecutive beats. The worse part for the Fed was the average hourly earnings ticking higher. Eventually the ultimate decision maker will be the US CPI report this Wednesday, but we will likely need a miss in the Core CPI numbers to see the July rate hike odds falling.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite couldn’t break above the high on a second try and pulled back again into the red 21 moving average. We might now see an ascending triangle forming with the moving average acting as dynamic support. So, if the price breaks below the moving average, then we will likely see a selloff into the 13174 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the key levels for the Nasdaq Composite. The buyers will need to break above the 13855 high to regain control and take the price towards the 14649 level. The sellers are trying to position for a pullback into the 13174 support first and upon a break lower, target the 12274 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the buyers tried to break out on the second try but failed as the price fell below the trendline that was supporting the momentum. We then got a brief rally out of the NFP report, but eventually the market gave it all back as the focus switched to the US CPI report on Wednesday. From a risk management perspective, the buyers would be better off buying from the 13174 support where we can also find the trendline and the 38.2% Fibonacci retracement level for confluence.
Upcoming Events
This week all eyes will be on the US CPI report on Wednesday. Higher than expected figures, especially on the core readings, should be negative for the Nasdaq Composite as the market will price in a more hawkish Fed and possibly a worse recession afterwards. On the other hand, lower than expected readings should lead to a rally as the market will price out the hawkishness and price in rate cuts and a soft-landing scenario. We finish the week with the US Jobless Claims on Thursday and the University of Michigan Consumer Sentiment on Friday.
