On the daily chart below, we can see that the price is again approaching the broken trendline that now may act as support for the buyers. The last bounce stalled at the red long period moving average and the resistance at 4061 where the sellers piled in and then increased the selling pressure as Fed Chair Powell signalled a possible 50 bps hike and a higher terminal rate.
Yesterday we got another selloff, but it’s not yet clear why that happened, although many are attributing it to problems with a regional US bank that sparked fears of contagion. Anyway, all eyes will be on today’s NFP report.
In the 4 hour chart below, we can see that after stalling at the resistance at 4061 and the 50% Fibonacci retracement level, the market sold off pretty aggressively due to Powell’s comments. The moving averages crossed to the downside and the sellers leant on the red long period moving average to extend the selloff even further into the NFP report.
We now may get a pullback as some position may be squared ahead of the event. The moving averages will act as resistance but the direction will most likely be decided by the data.
In the 1 hour chart below, we can see that yesterday the price rallied into the downward trendline as jobless claims missed expectations and then sold off as the stock market opened. It could have been just positioning into a strong NFP report or the fear of contagion due to the regional bank problems.
Hard to explain. The plan for the traders seems clear today: if the data beats expectations, we should see the sellers in control and push the price lower. On the other hand, if the data misses expectations we may see a rally towards the 4061 resistance.
