Nasdaq's 'suckers' rally' nears key resistance amid hawkish Fed, Iran tensions

The Nasdaq recovered all of the losses from last Thursday's sharp selloff driven by dip-buying and a reassessment of AI-related risks.

However, this bounce bears the hallmarks of a "suckers' rally" as bets on a more hawkish Federal Reserve build, Treasury yields climb, and the US dollar strengthens.

On top of that, Trump said yesterday that the US does not need to reach a deal with Iran — another major negative growth factor that could add to the pressure on equities.

The US PPI report is due today, but the data are unlikely to shift the outlook much given the already significant hawkish repricing triggered by Fed governor Waller's comments and the hot CPI reading.

Overall, the outlook for the Nasdaq remains neutral to bearish. A sustainable bull market would require an end to the Iran war or a more dovish Fed.

NASDAQ TECHNICAL ANALYSIS – DAILY TIMEFRAME

The Nasdaq (US100 CFD contract) is closing in on a key resistance zone near the 28,800 level, which coincides with a major downward trendline. Sellers are expected to emerge around that resistance, with a clearly defined risk above the trendline, betting on a pullback toward the major upward trendline. Buyers, meanwhile, will want to see a break above that level to boost bullish bets targeting new all-time highs.

NASDAQ TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

NASDAQ TECHNICAL ANALYSIS – ONE HOUR TIMEFRAME

On the 1-hour chart, there is little to add: sellers will look for short opportunities around the resistance zone or on a break of the upward trendline, while buyers will watch for a bounce off the minor upward trendline or a break above the major downward one to position for fresh highs. The red lines define the average daily range for today.

UPCOMING CATALYSTS

Today concludes the week with the US PPI data.