Yesterday’s US CPI report was broadly in line with expectations, with the market already expecting higher energy prices to push up August inflation figures. The Core measure, which the Fed is focusing on, was in line with forecasts, with the monthly figure coming in slightly higher than expected. The 3-month base annualized rate is now 2.4%, which is a good indicator for the Fed that its policy is working well. The question now is whether the labor market softens enough to bring inflation sustainably back to its target without a recession. And this is something that has never happened in history.
Nasdaq Composite Technical Analysis – Daily Timeline
On the daily chart, we can see that the Nasdaq Composite continues to consolidate around the support zone at 13810, with the red 21 moving average acting as dynamic support. The bias is more oriented to the upside given that the price recently made a new high around the 14148 level and the moving averages are breached to the upside, but watch out for a breakout to the downside as this could open the door to a much greater drop. .
Nasdaq Composite Technical Analysis – 4 Hour Timeframe
On the 4-hour chart we can see that we recently made a break below the minor uptrend line and the moving averages over this time frame have moved lower. This could turn into a bear flag pattern and the likely target would be support at 12274. Buyers will need a strong bounce off this support area to invalidate the bearish pattern, while sellers will want to see the price continue to rise. move lower to confirm the pattern’s breakout and position yourself for selling.
Nasdaq Composite Technical Analysis – 1 Hour Timeframe
On the hourly chart, we can see the tight range that the Nasdaq Composite has been trading in over the past week. Levels to watch are the last high at 13934 and the last low at 13732. In fact, a breakout higher should see more buyers pile in and extend the rally to a new high. Sellers, on the other hand, will want to see the price move below the 13732 low to a new low and build up to target the 13174 support.
Events to come
Today is likely to be a volatile day as many leading economic indicators will be released at the same time. In order of importance, we will obtain the data on unemployment claims, retail sales and PPI in the United States. The September FOMC meeting is already a done deal as the market is pricing in a 97% pause probability, so the data will influence November and December expectations. Tomorrow we wrap up the week with the University of Michigan Consumer Sentiment Report.