Last week, the Fed kept interest rates unchanged as expected but revised the Dot Plot on the more hawkish side with one more rate hike still expected by the end of the year and much less rate cuts projected for 2024. Fed Chair Powell has also admitted that the soft-landing scenario is not his base case at the moment despite the good macroeconomic projections, and that stronger than expected economic data may require additional tightening. For now, the economic data remains indeed strong with Jobless Claims crushing expectations last week and the US PMIs remaining quite resilient.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite sold off following the more hawkish than expected FOMC dot plot and has now reached the key support around the 13174 level where we have also the confluence with the 38.2% Fibonacci retracement level and the trendline. This is where we can expect the buyers to pile in with a defined risk below the trendline to position for a rally into the highs. The sellers, on the other hand, will want to see the price breaking below the trendline to pile in even more aggressively and target the 12274 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the support zone around the 13174 level. The price bounced on it yesterday and we might see a pullback into the swing level around the 13400 level where the sellers will be waiting to sell into the rally targeting a break below the trendline.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the bearish setup with the resistance around the 13400 level where we have also the confluence with the downward trendline and the Fibonacci retracement levels. This is where the sellers are likely to step in with a defined risk above the trendline and target a break below the major upward trendline. The buyers, on the other hand, will want to see the price breaking above the downward trendline to invalidate the bearish setup and position for a rally into the highs.
Upcoming Events
Today we will see the latest US Consumer Confidence report which surprised to the downside the last time and led to a rally as interest rates expectations turned more dovish. On Thursday, we will have another US Jobless Claims report which keeps on showing strength in the labour market maintaining the hawkish pricing steady. Finally, on Friday, we will get the latest US PCE data.
See also the video below
