Yesterday, the S&P 500 ended the day negative as the relief rally reached some key resistance levels. The first part of the week has been pretty empty on the data front, and we hadn’t any Fedspeak due to the blackout period. This has led to a relief rally which was exacerbated by weaker US PMIs as the market interpreted them as good news for inflation, although there were some worrying commentary on the labour market side. Beginning today, we will have many top tier economic data ahead as the new month comes with new reports.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 is trading near a key resistance level at 5104 where we can also find the confluence of the 50% Fibonacci retracement level and the red 21 moving average. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into a new all-time high.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the relief rally found some resistance around the 38.2% Fibonacci retracement level where we have also the red 21 moving average for confluence. These two levels will be the entry points for the sellers as a break above them should trigger an even stronger rally and invalidate the bearish setup. There’s not much else we can glean from this chart, so we need to zoom in to see some more details.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 5042 level where we can also find the red 21 moving average for confluence. If the price pulls back to the zone, the buyers will look to buy the dip as they will have a better risk to reward setup to target new highs. The sellers, on the other hand, will want to see the price breaking lower to confirm a reversal and increase the bearish bets into new lows.
Upcoming Events
Today we get the US Q1 GDP and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US PCE report.
