This week features several high-impact economic releases that could influence market direction. On Thursday, focus will be on Australia’s employment data, UK GDP, and key US reports including PPI, retail sales, and jobless claims. Friday brings US consumer sentiment and inflation expectations.
Meanwhile, the Nasdaq-100 continues its strong recovery from April lows, supported by a bullish technical setup and softer-than-expected US inflation. Core CPI rose just 0.2% in April, easing pressure on the Fed and boosting market sentiment. With tariff effects still muted and a U.S.-China trade truce in place, momentum remains to the upside, though traders remain alert to upcoming data and resistance levels.
High Impact Economic Events
Thursday 04:30 am (GMT+3) – Australia: Employment Change (AUD)
Since bottoming at 16,313.88 on April 7, the Nasdaq-100 has mounted a notable recovery. The initial rebound was signaled by the appearance of a long white candlestick, followed by a classic bottom failure swing pattern, where the subsequent low at 17,588.02 remained above the prior trough, and prices then broke above the previous peak at 19,231.50. This breakout marked a bullish structural shift and opened the door for further upside gains.
Technical confirmation was reinforced by the formation of a “Golden Cross,” as the 20-period Exponential Moving Average (EMA) crossed above the 50-period EMA—a widely followed signal indicating a potential shift in medium-term momentum.
Supporting indicators further validate the bullish outlook. The Momentum Oscillator remains above the 100 level, pointing to sustained upward pressure, while the Relative Strength Index (RSI) continues to trend above the 50 mark, indicating a prevailing bullish bias in the market.
Key Resistance Levels
If buyers maintain control of the market, traders may shift their focus to the following four potential resistance levels:
21,890.65: The first level of resistance is projected at 21,890.65, which aligns with the 261.8% Fibonacci Extension drawn from 19,231.50 to 17,588.02.
22,244.49: The second price target is seen at 22,244.49, corresponding to the peak from February 18.
23,534.13: The third upside target is noted at 23,534.13.
24,549.80: An additional upside target is determined at 24,549.80, reflecting the 423.6% Fibonacci Extension drawn from 19,231.50 to 17,588.02.
Key Support Levels
If sellers take control of the market, traders may focus on the following four key support levels:
20,178.84: The initial support level is seen at 20,178.84, representing the peak marked on May 2.
19,231.50: The second support level is positioned at 19,231.50, aligning with the swing high from April 9.
17,588.02: The third downside target is noted at 17,588.02, corresponding to the trough formed on April 21.
16,313.88: An additional downside target is determined at 16,313.88, reflecting the trough marked April 7.
Fundamentals
The Consumer Price Index (CPI) rose 0.2% in April, following a 0.1% decline in March. On a year-over-year basis, inflation slowed slightly to 2.3%, marking the smallest annual increase since February 2021.
Shelter costs were the primary driver of the monthly gain, rising 0.3% and contributing over half of the total increase. Energy prices climbed 0.7%, with gains in natural gas and electricity outweighing a drop in gasoline prices. Food prices edged down 0.1%, as grocery costs declined even as dining out became more expensive.
Core inflation (excluding food and energy) also rose 0.2% in April. Categories such as medical care, education, and motor vehicle insurance saw increases, while airline fares, used vehicles, and apparel declined.
Over the past 12 months, core CPI rose 2.8%, while energy prices fell 3.7% and food prices rose 2.8%.
According to Bloomberg, the data suggest limited near-term impact from higher tariffs, with muted price increases in tariff-sensitive goods like apparel and new cars. Companies appear to be absorbing some of the added costs, and consumer spending on discretionary items such as travel and recreation shows signs of softening.
A temporary U.S.-China trade truce has helped ease immediate concerns, but economists caution that inflation could pick up once pre-tariff inventories are depleted. Meanwhile, shelter costs continue to drive overall inflation.
Markets responded positively, with equities rising, bond yields falling, and expectations for Federal Reserve rate cuts later this year gaining traction.
Conclusion
With a packed economic calendar and key inflation data pointing to easing price pressures, markets are entering a critical juncture. The Nasdaq-100’s strong technical recovery, coupled with softer-than-expected CPI figures and muted tariff effects, supports a cautiously bullish outlook. However, upcoming data—especially US retail sales, PPI, and consumer sentiment—will be pivotal in confirming the momentum or signaling a shift in trend. Traders should remain attentive to both macro releases and key technical levels in the days ahead.
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