January 31, 2025 at 11:13AM
Fundamental
Overview
The Nasdaq continues to
maintain a positive outlook although it came under some pressure recently as
the DeepSeek news weighed on the tech heavy index.
The market has been making
new highs ever since the last US inflation data as it marked the top in the
repricing of rate cuts expectations and inflation fears.
The Fed on Wednesday kept interest rates unchanged as
widely expected and Fed Chair Powell maintained a neutral stance as they are
waiting for more inflation progress and more clarity on Trump’s policies before
cutting again.
The market is now back in
expecting two rate cuts by the end of the year with the first one seen in June.
The risks ahead lie around inflation as the market will want to see more
progress to avoid some tightening in financial conditions.
There are also risks to
growth, especially if Trump’s tariffs lead to trade wars. Right now, it seems
like he just threatens countries with tariffs to get better deals, so the
market generally fades the news.
Nasdaq
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the Nasdaq sold off all the way back to the key 21000 support following the DeepSeek news.
The dip-buyers piled in around the support to position for a new all-time high.
Overall, we continue to trade in a big range, so the sellers will need the
price to break below the support to gain more conviction or step in around the
resistance for better risk to reward setups.
Nasdaq Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the price is testing the “DeepSeek gap” now. This is where we can
expect the sellers to step in with a defined risk above the zone to position
for a drop back into the support. The buyers, on the other hand, will want to
see the price breaking higher to increase the bullish bets into a new all-time
high.
Nasdaq Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much we can add here although we have a minor support zone around the 21700
level where the buyers might lean onto to keep pushing into new highs. The
sellers, on the other hand, will look for a break lower to increase the bearish
bets into new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the US PCE and the US
Employment Cost Index.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
