S&P500 Technical Analysis | Forexlive
On the daily chart below, we can
see the big selloff that started as the market got rejected from the strong
4175 resistance and the strong NFP report changed the outlook of
future interest rates.
February was a bad month for risk
assets as many key economic indicators signalled a reacceleration in activity
and inflation which is a bad omen for the soft landing narrative that the
market has previously traded on. The trend for now is bearish as the upward trendline got broken and the moving
averages have crossed to the downside.
The next big test for the sellers
will be the big downward trendline that may give some support for the buyers. If the price
falls below that, there’s only the 3800 level that may save the day, otherwise
it will be a long fall towards the October 2022 low.
In the 4
hour chart below, we can see that we got a selloff on Friday as the US
PCE report
beat expectations on all fronts. The market is now looking at a higher terminal
rate and the chances of a recession may have increased.
The
moving averages are acting as resistance for the current bearish trend
and, barring some misses in the economic data this week, we should keep seeing
the sellers in control.
In the 1 hour chart below, we can
see that the price has pulled back since the low set after the US PCE report
and it’s now trading near the trendline and the previous support area that now
may turn into a resistance.
We can also see the Fibonacci
retracement levels that can offer some resistance for the
sellers with the price reacting to the 50% level. The divergence between the price and the MACD signals a weakening selling
momentum, so this pullback was due and if the price breaks the trendline we may
see a bigger pullback towards the 4025 level before finding sellers.