Nasdaq consolidates as traders await a key US CPI report ahead of Jackson Hole Symposium
FUNDAMENTAL OVERVIEW
The strong rally in the Nasdaq has stalled last Wednesday as the US-Iran deal failed to materialise within the expected timeline. Since then, the price action has been mostly rangebound with just the softer than expected NFP reportproviding some support.
The data triggered a dovish repricing in interest rate expectations, with the probability of a September rate hike falling to 38%, compared with 54% before the release. Despite that, the probabilities of a September hike rose back to 50%.
The reason for this whipsaw in expectations is that there was a significant loss of government jobs, which made the report look much softer than it actually was. In fact, the unemployment rate painted a different picture, falling further to 4.1%. Overall, the labour market remains on a better trajectory than it has been over the past three years.
Today, we have the US CPI report. The data will be critical for the September FOMC decision and Fed Chair Warsh’s speech at the Jackson Hole symposium. The focus will be on the Core CPI M/M measure which is expected at 0.2%.
A hot report will likely trigger a selloff in the short-term, with traders increasing rate hike bets. A soft or even in-line report, on the other hand, should reduce further the risk of Fed tightening and give the Nasdaq another boost.
NASDAQ TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see the Nasdaq is consolidating below the key swing level at 30,065. That’s where the sellers are stepping in with a defined risk above the level to position for a drop into the 26,300 support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new record highs.
NASDAQ TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the recent price action formed a symmetrical triangle. The price can break on either side but follows next is generally a more sustained trend. The buyers will continue to lean on the bottom trendline to keep targeting an upside breakout, while the sellers will lean on the top trendline to position for a downside break.
NASDAQ TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as traders will likely wait for the US CPI release to start taking positions. The red lines define average daily range for today.
UPCOMING CATALYSTS
Today, we have the US CPI report. Tomorrow, we get the US PPI data and the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales and the University of Michigan Consumer Sentiment report.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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