Amid a lack of significant negative news, the Nasdaq Composite ended the day in positive territory, potentially benefiting from the easing of geopolitical fears surrounding the Israel-Iran escalation. However, the recent shift in the Fed’s stance raises concerns about inflationary pressures, which could weigh on prices again. This week, the US PMIs and the US PCE will serve as market-moving catalysts, potentially providing further insights into the economic landscape.
On the daily chart, the Nasdaq Composite bounced off support at 15162 and rallied to the resistance level of 15453, where the blue 8 moving average provides confluence. This area could see selling pressure, with traders positioning for a potential drop to new lows if the index fails to break through. Conversely, a break above this resistance level could invalidate the bearish setup and suggest a rally towards 15929.
Zooming in to the 4-hour chart, we can observe the rally into the 15453 resistance zone, with the price encountering rejection at the blue 8 moving average. The 1-hour chart provides additional detail, indicating a potential shift in sentiment with the price breaking above the red 21 moving average, which had been acting as dynamic resistance. A continuation of this move higher could confirm the change in momentum, while a drop below the trendline could invite selling pressure and position traders for further declines.
This week, a slew of important economic data releases will provide further insights into the US economy. Today, we have the US Flash PMIs, which offer a preliminary assessment of business activity in the manufacturing and services sectors. On Thursday, the US Q1 GDP report will provide a comprehensive overview of economic growth during the first quarter, while the US Jobless Claims figures will shed light on the labor market. The week concludes on Friday with the US PCE report, a key inflation indicator closely watched by the Fed. The outcome of these data releases will likely influence the Nasdaq Composite’s price action in the coming days.
