On the daily chart below, we can see that the market found support at the 1731 level and started to range as buyers and sellers try to prevail on each other. The moving averages are still clearly crossed to the downside indicating a downtrend.
The Fed yesterday didn’t offer much support for the market as they hiked by 25 bps and kept everything unchanged, including QT and no rate cuts for this year besides the market pricing for ones. This should indicate that they are still resolute on bringing inflation down to their 2% target and that they may be seeing risks in the economy that the market has not yet fully priced in.
On the 4 hour chart below, we can see more closely the range created between the support at 1731 and the resistance at 1800 where we can also find the 38.2% Fibonacci retracement level of the entire selloff.
The sellers leant again on the resistance and extended the fall as the Fed kept on its tightening path, although they were less hawkish this time as risks around the banking sector forced them to be cautious.
On the 1 hour chart, we can see that the price has now pulled back a bit since yesterday’s selloff and it’s now at the 38.2% Fibonacci retracement level. We have also the red long period moving average here for confluence, so we should see the sellers piling in here or the 50% Fibonacci level.
The target on the downside would be first the support of the range and second new lower lows. The buyers, on the other hand, will need to break above the 61.8% Fibonacci level to target again the resistance and try a breakout to the upside.
