S&P 500 Technical Analysis | Forexlive
On the daily chart below for the S&P
500, we can see that the market just can’t break above the key resistance at 4175 as every time the price
reaches that level it gets rejected. The moving
averages are still crossed to the upside and the buyers will keep on leaning on
them but watch out for the break below the trendline as that may be an early sign of
a change in trend.
The issue here is that the
soft-landing narrative has many flows as economic data keeps pointing to a
recession and recent jobless claims started to trend higher possibly signalling
the bottom in the unemployment rate. If the labour market doesn’t deteriorate
enough, inflation will remain above target and the Fed will be forced to hike
even more and, in the end, causing a worse hard landing. So, the odds are in
favour of the hard landing crowd.
In the 4
hour chart below, we can see that the recent rally towards the key resistance
has been diverging with the MACD as the momentum was weak amid
misses in US
Retail Sales and Jobless Claims. Today we will see again another US
Jobless Claims report and tomorrow the US PMIs.
It’s
likely that the sellers will pile in aggressively in case the data deteriorates
further, while the buyers will still be a bit cautious in case the data beats
as there’s always the possibility that inflation remains above target for too
long and forces the Fed to raise rates above the projected level.
In the 1
hour chart below, we can see the range created around the key resistance. This
is the spot to watch in conjunction with the economic data. If we see misses
and the price breaks below the range, then the sellers should pile in and
target the support at 4100. On the other hand, if
the data beats and the price breaks above the range, then the buyers may jump
onboard and push the price to new highs with the 4300 level as the ultimate
target.