S&P 500 Technical Analysis | Forexlive
On the daily chart below for
S&P 500, we can see that after bouncing from the key 4061 support again, the price rallied into
the next key resistance at 4175 and stalled. This level has been holding
buyers at bay since September 2022. Boring… Anyway, the market is still
uncertain if we get a soft landing or a hard landing. On one hand, the labour
market remains resilient as shown by the strong NFP report last Friday.
On the other hand, the
disinflationary trend seems to be slowing as shown by the CPI report yesterday, and the Fed
might be forced to do more to bring inflation back to the 2% target. At the
moment, this is not what the market expects but it also doesn’t have any strong
conviction to justify a breakout.
In the 4
hour chart below, we can see that we got stuck in a range between the 4061
support and the 4175 resistance. The CPI data yesterday was in line with
expectations with a little improvement on the Y/Y figure and the core services
ex housing number, which is what Fed Chair Powell is looking at. Overall, it
justifies the market’s expectation for a pause in June, but it’s hard to see
rate cuts without a deterioration in the labour market data.
In the 1
hour chart below, we can see the messy price action after the CPI report. First
up into the resistance, then down into the support and then up again. Real
chop. There’s nothing to do here other than waiting for a clear breakout on
either side and then go with the flow. The next key risk events are the US Jobless Claims today
and the University of Michigan Consumer Sentiment survey tomorrow.