On the daily chart below, we can see that after bouncing from the broken trendline, the price just kept on rising defying any bad news. The stress in the banking sector didn’t cause any major capitulation, on the contrary, the market is now trading above the levels seen before the failure of the Silicon Valley Bank.
The Fed is not on the market’s side either as they hiked by 25 bps and kept QT and the Dot Plot the same, hinting that they may do more if inflation doesn’t abate.
Last Friday, even the hot US PMIs data couldn’t bring the market down even though it may be a signal that the economy is still too strong and the Fed may have to do more.
In the 4 hour chart below, we can see that the buyers are eyeing the strong resistance level at 4061 where we can also find the 61.8% Fibonacci retracement level. A break above this resistance would open the door for a rally towards the key 4175 level.
The sellers are most likely to lean on the 4061 resistance with defined risk. This may even turn into an inverted head and shoulders pattern if the buyers manage to break above the neckline. The target in that case would be above the 4175 level.
In the 1 hour chart below, we can see that there’s also another resistance zone at the 4040 level where the sellers may give it a try although with a worse risk to reward ratio than the 4061 level.
This week the data to watch are the US Consumer Confidence on Tuesday, US Jobless Claims on Thursday and the US PCE on Friday.
