Fundamental Overview
The market is still licking its wounds as the price action remains tentative ahead of the US Jobless Claims today. The ugly US ISM Manufacturing PMI and the weak US NFP report of last week are still fresh in everyone’s mind.
At the moment the market is expecting the Fed to cut rates by 50 bps in September and a total of 110 bps of easing by year-end.
In the American session we will get the latest US Jobless Claims figures. Given the market’s sensitivity to weak releases, if we get bad data, we might see some more risk-off flows coming into the market. On the other hand, good figures could see the risk sentiment improving.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 bounced around the swing low level at 5200 but eventually erased most of the gains as the sentiment remains fragile. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into the 5400 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 5000 level next.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we now have a strong resistance around the 5366 level where we can also find the 50% Fibonacci retracement level for confluence. This has created a range between the 5200 support and the 5366 resistance. The buyers will look to go long from the support while the sellers will keep on going short from the resistance.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see the recent catalysts that eventually pushed the market down over 8%. There’s not much else we can glean from this timeframe as the market participants will wait for the US jobless claims today before piling in with more conviction. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures which will likely be a strong market moving release given the market’s focus on the labour market. The market will also pay close attention to Fed members’ comments with Fed’s Barkin scheduled to speak later in the day.
