Last Friday, the NFP report
massively beat forecasts with 336K jobs added against 170K expected. The
unemployment rate remained unchanged at 3.8% and average hourly earnings were a
touch lower. Overall, the market viewed it as a good release with the
soft-landing narrative prevailing. Over the weekend, Hamas launched a big attack
against Israel which might cause some risk aversion in the
markets, although it’s likely to be short-lived as long as the conflict remains
in the Levant.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq Composite
eventually rallied strongly from the trendline and the
38.2% Fibonacci retracement level
following the strong NFP report. The buyers might now be in control and the
target should be the downward trendline around the 13800 level. The sellers, on
the other hand, will need the rally to fail completely and the price to get
back below the 13174 support to
increase the bearish momentum and take the Nasdaq Composite to new lows.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see more closely that
the Nasdaq Composite broke out of the consolidation around the support zone as
the price breached the resistance defined by the 38.2% Fibonacci retracement
level. The buyers are likely to pile in with more conviction now targeting the
13800 level.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that we
had a divergence with
the MACD right
into the strong support zone which is generally a sign of weakening momentum
often followed by pullbacks or reversals. The Nasdaq Composite might open lower
today following the events over the weekend, but the buyers should take that as
a dip-buying opportunity and pile in around the resistance turned
support with a defined risk below the most recent swing low.
The sellers, on the other hand, will want to see the price breaking lower to
start positioning for further downside and break of the most recent low.
Upcoming
Events
This week we have some important inflation reports. On
Wednesday, we will get the US PPI data and later in the day the FOMC Meeting
Minutes. On Thursday, it will be the time for the main release of the week,
that is the US CPI report, and at the same time we will see the latest Jobless
Claims figures. Finally, on Friday we will get the University of Michigan
Consumer Sentiment report.