Last week
was the Jackson Hole Symposium week and we
have heard from many Fed members about their opinions on the momentary policy
going forward. There seems to be a consensus for a pause in September as they
try to “carefully” assess the lag effects of their tightening to date.
Nonetheless, they are ready to do more if conditions require further tightening
and in fact, they keep reaffirming their data dependency. The economic data
since the last FOMC meeting has been surprising to the upside with the labour
market remaining very strong, but the last two inflation reports showed the Core M/M
inflation rising by just 0.16%. Overall, it looks like a soft landing scenario
but the latest US PMIs showed
that there might be pain ahead.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite bounced on a key support at 13174
and rallied back towards the broken trendline where we
had also the confluence with the
red 21 moving average. The
price got rejected there as the sellers leant on the moving average to position
for another fall below the key support. The bias for now remains bearish as the
price has been printing lower lows and lower highs and the moving averages are
crossed to the downside.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see more closely the
resistance zone that we had around the broken trendline with the 50% Fibonacci retracement level
acting as a further barrier. This resistance will be key for the buyers as they
will need the price to break above the level to switch the bias from bearish to
bullish and start targeting a new high.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that we
have a minor resistance around the 13615 level where we have the confluence of
the 50% Fibonacci retracement level and the red 21 moving average. This is
where we can expect the sellers to pile in with a defined risk above the level
to target the break below the 13174 support. The buyers, on the other hand,
will want to see the price breaking higher to pile in and target a break above
the 13850 resistance.
Upcoming
Events
This week is an important one given that we will see
many key labour market data, including the US NFP, before the next FOMC
meeting. We start tomorrow with the US Consumer Confidence and the US Job
Openings. On Wednesday, we have the US ADP report. Moving on to Thursday, we
will have the US Jobless Claims and the US PCE data. Finally, we conclude the
week with the US NFP and the ISM Manufacturing PMI on Friday. Although the Fed
keeps all the options on the table, it’s also leaning more towards a pause in
September, so we will need strong data to make the market to expect a hike at
the upcoming meeting.