Technical Analysis On The NASDAQ As The Fed Is Set To Cut Rates

The NASDAQ finds itself into major resistance heading into a likely Federal Reserve 25 basis point rate cut. Investors need to be watching a daily close above 17,700. As of now the path of least resistance is downside, unless it can reclaim this major level (seen in the chart above).

Investors are seeing the NASDAQ make lower highs but also higher lows. This is called a wedge pattern. Wedge patterns are periods where price consolidate.

Investors are hoping for a breakout that would lead the NASDAQ to new all-time highs. However, the labor market is slowing, consumer spending is slowing and historically, when the Federal Reserve starts cutting rates, the market falls.

Using technical analysis, investors can follow a potential breakout or rejection. It should be known one way or another by this coming Friday, after the Federal Reserve begins its rate cutting phase.