S&P 500 Technical Analysis | Forexlive

The S&P 500 last week jumped following the miss
in the US CPI report
and went into consolidation ever since. The market doesn’t expect the Fed to
hike anymore and it’s pricing in the
first rate cut in May 2024.

At the moment, it looks like the market is still
trading based on inflation and interest rate expectations, but the softening in
the labour market as seen with the last NFP and Jobless Claims last
week, is gathering pace and it’s something to keep a close eye on.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
went into consolidation just below a key swing level after the big jump
triggered by the miss in the US CPI report. The rally was indeed overstretched
as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price is
now leaning on the upward trendline. This is
where we can expect the buyers to step in with a defined risk below the
trendline to position for a rally into the key swing level at 4543 looking for
a breakout. The sellers, on the other hand, will want to see the price breaking
lower to pile in and position for a drop back into the support around
the 4400 level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price is diverging with
the MACDnear the key swing
level. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, it could be a confirmation that we might
indeed see a deeper pullback into the 4400 level. Watch out for what happens
around these key levels.

Upcoming Events

This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we
have the FOMC Meeting Minutes but it’s unlikely to be market moving given that
it’s three-weeks old data. On Wednesday, we have the US Jobless Claims report
which is probably going to be the most important release of the week. Finally,
on Friday, we conclude the week with the latest US PMIs.