S&P 500 Technical Analysis | Forexlive

The Fed eventually paused its
tightening cycle last week at 5.00-5.25%. The reason was that they wanted to
see more economic data before deciding on further hikes as they are trying to fine-tune
the right level of monetary restraint needed to bring inflation down to the 2%
target without causing too much pain in the economy.

Fed
speakers keep repeating that they want to see more data and Fed Chair Powell
confirmed during his testimony to Congress that getting back to the 2% target
has a long way to go and that two more rate hikes this year was a “pretty good
guess” if the economy performs as expected.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
is finally pulling back after a very strong rally since the beginning of June.
Technically, the first support for the
pullback should be the 4324 level where we will also find the red 21 moving average for
further confluence. That’s
where we should expect dip-buyers to start piling in to target new highs.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the moving
averages have crossed to the downside indicating a bearish momentum. We can
also find the 38.2% or 50% Fibonacci retracement levels near
the 4324 support which adds even more strength to the level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a downward trendline
defining the short term trend with the red 21 moving average acting as dynamic
resistance. As long as this trendline holds, we can expect the sellers to lean
on it targeting the 4324 support. The buyers, on the other hand, will either
wait for the price to come to the 4324 support or pile in as soon as the price
breaks above the trendline.

The next data to watch are
the US Jobless Claims today and the US PMIs tomorrow.