Yesterday, the Nasdaq Composite had a negative day following another slate of strong US economic data that pushed back further the rate cuts expectations and raised the Treasury yields. Overall, the picture is still supportive for the soft-landing narrative as inflation and inflation expectations continue to retreat while the economy remains resilient. Yesterday’s price action might have been just some profit taking after all ahead of the FOMC rate decision today and key data in the next few days with the NFP report on Friday.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday closed the day negative as the price continues to consolidate ahead of the FOMC rate decision today. From a risk management perspective, the buyers will have a much better risk to reward setup at the trendline where we can also find the confluence with the previous high, the 38.2% Fibonacci retracement level and the red 21 moving average.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bullish setup around the previous high at the 15150 level. If the price were to break below the trendline, then we can expect the sellers to extend the drop into the 14477 level next. The divergence with the MACD, which is generally a sign of weakening momentum, suggests that a pullback into the 15150 level is likely.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the market consolidating between the 15635 high and the 15430 support zone. The best strategy is generally to wait for a breakout supported by a fundamental catalyst but one can also “play the range” by buying at support and selling at resistance.
Upcoming Events
Today we will see the US Employment Cost Index and the ADP data before the FOMC rate decision later in the day. Tomorrow, we get the latest US Jobless Claims figures and the ISM Manufacturing PMI. On Friday, we conclude the week with the US NFP report.
