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
S&P 500 Daily
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
S&P 500 Technical Analysis
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
S&P 500 1 hour
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: