S&P 500 Technical Analysis | Forexlive

The S&P 500 managed to hold into the last week
gains and consolidated near a key resistance as the first part of the week
didn’t offer any meaningful catalysts. The things should change today though as
we will see the latest US Jobless Claims data and given the recent weakness in
the labour market data, the market is likely to react strongly to this report.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
last week managed to pull off an incredible rally even in the face of weakening
labour market data. The market might have interpreted such data as a good thing
for inflation and the soft-landing scenario, but what matters is generally the
trend and that shouldn’t be bullish.

For the sellers the S&P 500 is now at great
levels to position for another selloff into new lows as we have the previous
swing high, the trendline and
61.8% Fibonacci retracement level
for confluence. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and target the highs.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the resistance zone
around the 4390 level highlighted by the blue box. This is a crucial spot for
market participants ahead of today’s data release. A selloff should confirm the
bearish setup and give the sellers even more conviction to target new lows. The
buyers, on the other hand, will have much work to do to break higher after such
a strong rally.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price is now starting to diverge with
the MACD right
at the key resistance. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. A break below the trendline should give the
sellers further confirmation for a bearish move. The sellers should also watch
out for a spike higher followed by a quick reversal as it can happen sometimes
around such key resistances.

Upcoming Events

Today we have the US Jobless Claims on
the agenda, while tomorrow it will be the time for the University of Michigan
Consumer Sentiment report. The market is likely to focus on the US Jobless
Claims given the recent weakness in the labour market data. Weak figures are
likely to weigh on sentiment and push the S&P 500 lower, while good
readings might be enough for the market to rally.

See the video below