FUNDAMENTALOVERVIEWThe Nasdaq was on the verge of a breakdown last week as continuedescalations in the Strait of Hormuz and hawkish Fed expectations sappedmarket’s optimism. Everything changed on Thursday when Trump cancelled hisplanned attacks on Iran and announced a deal with confirming reports from theIranian side. This surprising breakthrough triggered a strong reversal onexpectations of lower oil prices, easing inflation concerns, lower risk of ratehikes and improved growth outlook.In the short-term, the focus continues to be on this new development, so wecan expect the bullish bias to hold (all else being equal) but the FOMCdecision today remains a risk and that’s likely why we’ve been seeing someweakness since yesterday as traders hedge into the event. The Fedis widely expected to keep interest rates unchanged and remove the easingbias from the statement. At this meeting, we will also get the Summary ofEconomic Projections (SEP) where inflation is expected to be revised higherwhile the unemployment rate could see a slight downtick in the short-term. Thefocus will be mostly on the dot plot which is expected to show no cuts thisyear and the next. All of this is expected and already priced in.You can find a comprehensive Fed preview hereThe main hawkish surprises include a rate hike in the 2026 dot or more thanone in 2027. In this scenario, we will likely see a selloff in the Nasdaq with theprice falling back to pre-deal levels. On the other hand, the dovish surprisesinclude a rate cut in the 2026 dot or in the 2027 dot as that would implicitly signalan easing bias. In such a scenario, we can expect the Nasdaq to rally into newrecord highs in the next days. Fed Chair Warsh’s first press conference will also be in focus, although Iwould argue that the Board is going to be more important than the Fed Chair atleast until the markets get to know him better and he proves to be independent.Trump just gave Warsh a big assist by ending the war, so he can say the Fed canlook through the short-term increase in inflation. Looking ahead, the risk is that the negative supply shock caused by theUS-Iran war turns into a positive demand shock as the conflict ends that boostseconomic activity further requiring rate hikes anyway. That’s likely to be thenext tail risk.NASDAQ TECHNICALANALYSIS – DAILY TIMEFRAMEOnthe daily chart, we can see the Nasdaq probed below the key 28,700 support but eventually bouncedback strongly on the surprising US-Iran breakthrough and extended the gainsinto new all-time highs as optimism grew. There’s not much we can glean fromthis timeframe, so we need to zoom in to see some more details. NASDAQ TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOnthe 4 hour chart, we can see themarket opened the week with a positive gap and rallied into new highs. From arisk management perspective, the buyers will have a better risk to reward setuparound the 29,800 support to position for a rally into new record highs. Thesellers, on the other hand, will want to see a break to pile in for a drop intothe 28,700 level next.NASDAQ TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’snot much we can add here as the 29,800 support zone provides the best dip-buyingopportunity from a risk to reward perspective. Ideally, we see weakness tradinginto the FOMC decision and then a reversal from the support as the Fed deliverson expectations with no major hawkish surprises. Conversely, hawkish surprisesshould send the market back to pre-deal levels. The red lines define average daily range for today. UPCOMING CATALYSTSToday, we have the FOMCrate decision. Tomorrow, we get the latest US Jobless Claims figures. OnFriday, the US-Iran “peace deal” is expected to be signed in Switzerland. This article was written by Giuseppe Dellamotta at investinglive.com.