Last week, we got another set of good economic data for the US with signs of further disinflation in the core inflation measures. The soft-landing narrative should be in full swing with resilient labour market, lower inflation, and lower inflation expectations. Nonetheless, the Nasdaq Composite price action remains rangebound, and at this point it might even be because we are getting near to the FOMC rate decision. Looking forward, the uncertainty is very high as we either get a soft or hard landing, but the weakness in other economies like the Eurozone skews the picture to the worse scenario.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite remains rangebound around the red 21 moving average which is acting as dynamic support. This is the last line of defence for the buyers, so we are likely to see them stepping in with a defined risk below the moving average to target a rally into the 14649 resistance. The recent break and retest of the broken trendline though gives the sellers more chances of success and the 13174 support with another major trendline for confluence looks attractive.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has recently broke out of the counter trendline that was defining the bearish flag pattern. This should be another confirmation that a bigger move to the downside might be in the cards with the moving averages crossing to the downside and the price breaking through the support zone. The sellers should now pile in even more aggressively and target the 13174 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the selloff last Friday led to a break below the lower bound of the mini range. The bias is now bearish, and we should see the sellers having full control. The buyers, on the other hand, will need the price to rally back above the 13822 support zone to invalidate the bearish setup and position for more upside.
This week has just a couple of important economic releases with the FOMC rate decision on Wednesday being the highlight. The Fed is expected to keep rates unchanged, and the market will focus more on the Dot Plot and Fed Chair Powell’s press conference, although he’s likely to repeat that they remain data dependent. Moving on to Thursday, we will see another US Jobless Claims report, while on Friday we conclude the week with the US PMIs data.