On the daily chart below, we can see that after bouncing from the key support level at 32684, the price rallied towards the resistance at 33538. The sellers leant on that level and the red long period moving average before the big selloff caused by Fed Chair Powell’s comments on a possible 50bps hike at the March meeting and a higher terminal rate.
The price is now again at the key support level and the breakout will come down to the NFP report tomorrow. If the data beats expectations, we should expect the breakout and a bigger selloff with the first target being at 31800. In case the data misses forecast, we should expect another rally probably towards the resistance at 33538.
On the 4 hour chart below, we can see more closely how the rally stalled at the resistance at 33538 where we had also the daily long period moving average and the 50% Fibonacci retracement level of the entire downward move.
That was a strong level that buyers couldn’t break and folded as soon as Powell sounded more hawkish than expected. The moving averages are now crossed to the downside and will act as resistance in case we get a pullback before the data.
In the 1 hour chart below, we can see that he price diverged with the MACD right at the support and we got a pullback. This should be a sign of uncertainty before the data release. The pullback may extend to the 32937 level where we can also find the 38.2% Fibonacci retracement level just above.
That’s going to be a good resistance zone for the sellers and one that buyers will need to break decisively if they want to target the resistance at 33538. Anyway, the data will guide the market, so watch out for tomorrow.
