S&P 500 Technical Analysis

Last Friday, the S&P 500 finished the day
positive as the US PCE report
came mostly in line with expectations. The market has already priced out almost
all the rate cuts that were expected at the beginning of the year and it’s now
expecting just one in September or December. This means that we will need more
worrying data to start pricing in a rate hike and put more downward pressure on
the market. For now, the dip-buyers are again in control as we continue to
erase the losses from the beginning of the month.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
reached
the key resistance level
at 5104 where we can also find the confluence of the
50% Fibonacci
retracement level and the red 21 moving average. This
is where we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into new lows. The buyers, on the other hand,
will want to see the price breaking higher to invalidate the bearish setup and
position for a rally into a new all-time high.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we
also have a downward trendline adding
some extra confluence to the 5104 resistance. This should give the sellers even
more conviction as they have a strong barrier where to lean on with minimal
risk and big reward. The buyers, on the other hand, will need to push the price
above this strong resistance to invalidate the bearish setup and open the door
for a rally into a new all-time high.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price action into the resistance level might have formed a bearish flag, but
we will need to see the price breaking the bottom trendline to confirm it. In
case of a breakout to the downside, the measured target would stand around the
4800 level.

Upcoming Events

Tomorrow, we have the US Q1 Employment Cost Index and
the Consumer Confidence report. On Wednesday, we get the US ADP, the ISM
Manufacturing PMI, the Job Openings and the FOMC rate decision. On Thursday, we
will see the latest US Jobless Claims figures. On Friday, we conclude the week
with the US NFP and ISM Services PMI.

This article was written by FL Contributors at www.forexlive.com.