Yesterday, the Nasdaq Composite broke through the cycle high following the US CPI data where all the figures came in line with expectations despite some fears of higher numbers. The market is going all-in on the soft-landing trade with the Nasdaq Composite now eyeing the all-time high. There’s a high risk of a pullback today though as the Fed could push hard against rate cuts expectations. In fact, the Dot Plot will be the focus of market participants with more than two rate cuts pencilled for 2024 signalling a dovish leaning, while less than two hinting to a more hawkish stance.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday broke through the cycle high as the US CPI came in line with expectations dissipating some fears about higher figures. Technically, there’s not much in the way until the all-time highs now except a swing high from March 2022 at 14646.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the breakout above the cycle high is diverging with the MACD. This is generally a sign of weakening momentum often followed by pullbacks or reversals. This is a sign for caution, especially given the FOMC rate decision today where the Fed might push hard against rate cuts expectations.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the breakout from yesterday and from a risk management perspective, the buyers would be better off waiting for a pullback into the 14450 resistance now turned support to position for further upside. The sellers, on the other hand, will want to see the price breaking below the 14450 level to pile in and target a drop into the 14050 support.
Upcoming Events
Today we have the US PPI data followed by the FOMC rate decision where the Fed is expected to keep interest rates unchanged. Tomorrow, we will see the latest US Retail Sales and Jobless Claims figures, while on Friday we conclude the week with the US PMIs.
