Nasdaq Technical Analysis – The Fed's preferred inflation measure seen higher

Fundamental Overview

The Nasdaq remains under pressure as despite a softer US CPI and US PPI reports, the components that feed into the Core PCE increased the Fed’s preferred inflation measure. In fact, the Core PCE Y/Y is now projected at 2.7% vs. 2.6% prior, while the M/M measure is seen at 0.3% vs. 0.3% prior.

The main fear in the market is that in case we get a slowdown, the Fed might not be fast enough in cutting rates amid the inflation constraint and eventually worsen the economic pain. Moreover, the uncertainty around Trump’s tariffs add to those expectations of a slowdown in growth and potentially higher inflation in the short-term.

Today we have the University of Michigan Consumer Sentiment report. As a reminder, the jump in long-term inflation expectations to a new 30-year high in the prior report weighed on the market, so that’s going to be in focus today.

Nasdaq Technical Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq dropped below the major trendline which doesn’t give it a good look as there’s not technical support until the 18400 level. From a risk management perspective, the sellers will have a better risk to reward setup around the broken trendline where they can position with a defined risk above the trendline to target a drop into the 18400 level next. The buyers, on the other hand, will want to see the price rising back above the trendline to regain some conviction and pile in for a rally into new all-time highs.

Nasdaq Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the bearish momentum. This is where we can expect the sellers to step in with a defined risk above the trendline to position for another selloff into new lows, while the buyers will look for a break higher to extend the pullback into the major broken trendline around the 20000 level.

Nasdaq Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much we can add here as the sellers will look for a rejection around the trendline, while the buyers will look for a break higher to target new highs. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment report.