The US CPI report missed expectations across the board yesterday and led to a positive risk sentiment in the market lifting the Nasdaq Composite above the high. The market pricing for a 25 bps hike at the July FOMC meeting though remained unchanged, probably because of the strength in the labour market and the Fed speakers not hinting to any skip or pause after the CPI release. Anyway, this hike is seen as the final one and the focus will now switch to growth. As long as there’s no sign of a hard landing happening, the dips in the Nasdaq Composite should be bought.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the red 21 moving average acted as dynamic support for the Nasdaq Composite and the buyers kept on leaning on it to position for an upside breakout. The target should now be the 14649 level as there’s no strong resistance in sight until then.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the resistance at 13867 and the higher lows defined by the black trendline formed an ascending triangle that was eventually broken yesterday. We can generally see big moves following breakouts on either side as the momentum increases due to more buyers or sellers piling in.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had a minor pullback into the broken resistance turned support where the price bounced. We should see the buyers piling in here with a defined risk below the support to target the 14649 level. The sellers, on the other hand, will want to see the price breaking below the support level to confirm a fakeout and extend the fall into the black trendline.
Upcoming Events
Today the focus will be on the US Jobless Claims. Higher than expected data should lead to a pullback, while lower than expected ones should keep the rally going. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment report.
