Basic overview
The Nasdaq has been stuck in a huge range since the last one FOMC decision as the market saw it as more hawkish than expected.
The Fed continues to bet on the progress of inflation to proceed with further rate cuts as indicated by Fed's Waller this week. Therefore, the market is waiting for more data to decide what the Fed is going to do next.
Next week's soft CPI report is likely to trigger a strong dovish reaction in the markets, especially given the rapid rise in Treasury yields over the past couple of months. That should support the stock market and lead to more gains. On the other hand, another hot CPI isn't going to help and could trigger another selloff.
Today, we have the US NFP report and although the CPI is going to have a bigger impact on interest rate expectations, it will still be a market moving event, especially if we get big deviations from the numbers. is expected.
Currently, the market would like to see soft but not too soft data. A very bad or very hot report could put more pressure on the market. See also wage growth, like Bowman Fed they recently indicated that it remains above the pace consistent with their inflation target.
Nasdaq Technical Analysis – Daily Schedule
On the daily chart, we can see that the Nasdaq has been in consolidation mode since the last FOMC decision with the 21000 level acting as a key support. From a risk management perspective, buyers will have a better risk to reward position around the support to position for a rally to new all-time highs. On the other hand, the sellers will want to see the price break lower to increase the bearish bets to low levels with the 20380 level as the first target.
Nasdaq Technical Analysis – 4 Hours Timeframe
On the 4 hour chart, we can see that the price action has what looks like a descending triangle. The price can break on either side of the pattern but there is usually a strong continuation in the direction of the breakout, so market participants wait for that to go. -in or add more to their posts.
Nasdaq Technical Analysis – 1 Hour Timeframe
On the 1 hour chart, we can see that the price action has been tightening as we await the release of the US NFP. If the price stays above the 21350 level, that would be more positive and may take us to the 21700 level. On the other hand, if the price stays below the 21180 level, it is likely that the sellers push the price into the support and focus on breaking below it. The red lines define the average daily range for today.
Catalysts to come
Today we finish the week with the US NFP report.