S&P 500 Technical Analysis – The market is waiting for good news

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.

This article was written by Giuseppe Dellamotta at www.forexlive.com.