Nasdaq Technical Analysis – The market awaits the NFP report

Fundamental
Overview

The Nasdaq this week rallied
strongly following the beat in the US ISM Services PMI where the data showed that the last
month drop was just a blip and overall we have a resilient economy with lower
inflationary pressures. The data continues to reinforce the narrative that the
next move is more likely to be a rate cut, and that inflation is likely to keep
coming back to target. This should keep the market supported amid a positive
risk sentiment.

The main risk today could
come from the US NFP report where bad data across the board could weigh on
sentiment and push the market lower. Overall, the buyers won’t want to see hot
wage growth and a big jump in the unemployment rate as both the outcomes should
be bearish for the market.

Nasdaq Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq rallied to a new all-time high recently following the
strong US data. From a risk management perspective, the buyers will have a much
better risk to reward setup around the 18255 level where we can find the confluence
of the recent swing low and the trendline.
As things stand though, it’s unlikely to see such a big drop without ugly
labour market numbers or a surprising hot inflation report.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price recently surged to a new all-time high and consolidated
right around the previous all-time high level. This is where the buyers are
stepping in with a defined risk below the level to position for a continuation of
the trend. The sellers, on the other hand, will want to see the price breaking
lower to gain some control and target the 18255 level.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a resistance
now at 19108 and a trendline acting as support around the 19000 level. The red
lines define the average
daily range for today, although the price can extend beyond these levels
when there are strong catalysts like today’s NFP report.

The buyers will want to see
the price breaking higher to increase the bearish bets into new highs. Alternatively,
they can lean on the trendline with a defined risk below it. The sellers, on
the other hand, will want to see the price breaking lower to pile in and target
the 18700 level.

Upcoming
Catalysts

Today we conclude the week with the US NFP report where the consensus sees
185K jobs added in May and the unemployment rate remining unchanged at 3.9%.
Moreover, the average hourly earnings are seen at 3.9% for the Y/Y figure and
0.3% for the M/M measure.

This article was written by Giuseppe Dellamotta at www.forexlive.com.