Last week, the Fed hiked the interest rates by 25 bps as widely expected. The market was more focused on the Fed Chair Powell’s press conference for signals on the future moves. Unfortunately, Powell didn’t offer anything for the market as he kept all the options on the table and just repeated their data dependency when it comes to their future policy decisions. The economic data after the FOMC meeting supported the soft landing scenario with the US Jobless Claims beating expectations and the US PCE and Employment Cost Index missing the forecasts.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 has eventually reached the key resistance at 4628. A break above this resistance would open the door for the all-time high. The price pulled back on the first test as the sellers are starting to step in aggressively here as the risk to reward is incredibly good, even in case of a deeper pullback. The buyers are likely to lean again on the red 21 moving average if the price gets there, but for now it’s just a waiting game as the market continues to consolidate.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the recent selloff from the key resistance ended at the 4558 support where the buyers stepped in with a defined risk below the level to target again a breakout of the resistance. We are likely to see some more rangebound price action here until the next catalyst pushes to price in either direction.
S&P 500 Technical Analysis – 1 hour Timeframe
This week we have lots of economic data. On Tuesday, the market will be focused on the ISM Manufacturing PMI and the US Job Openings. On Wednesday, it will be the time for the US ADP data. Moving on to Thursday, the US Jobless Claims and the ISM Services PMI will be the main events. And finally, on Friday, the main event of the week: the US NFP report. Given the market focus on the soft-landing narrative, we are likely to see more upside pressure in case the data comes out positive and vice versa in case the data disappoints.
See also the video below: