The Fed made the decision to hold steady at 5.00-5.25% last week, as it aims to gather more economic data before considering additional increases. The objective is to achieve the appropriate level of monetary restraint that can effectively curb inflation without risking a severe recession or causing harm to the overall economy.
During his testimony to Congress yesterday, Fed Chair Powell reaffirmed their commitment to lowering inflation to the target level but acknowledged that there is still a considerable distance to cover. He further stated that if the economy performs as anticipated, the two rate hikes outlined in the Dot Plot would be a "pretty good guess".
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite remains in a strong bullish trend. The recent pullback wasn’t caused by a negative development on the data front, so it may be just a technical pullback. The 13174 level is a good support where we can also find the 50% Fibonacci retracement level and the red 21 moving average. That’s where we should expect the market to bounce all else being equal.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is currently testing the red 21 moving average and a break below it should open the door for a fall into the 13174 support. The buyers should lean on that support level with a defined risk below it and target a new higher high. The sellers, on the other hand, should wait for the price to break below the 13174 support before piling in and target the 12274 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is printing lower lows and lower highs with the moving averages crossed to the downside indicating a downtrend. If the moving averages cross again to the upside and the price makes a new higher high, the buyers may start to pile in again.
The next important economic reports to watch are the US Jobless Claims today and the US PMIs tomorrow.
