Last week, we got another set of good economic data
for the US with signs of further disinflation in the core inflation measures.
The soft-landing narrative should be in full swing with resilient labour
market, lower inflation, and lower inflation expectations. Nonetheless, the
S&P 500 price action remains rangebound, and at this point it might even be
because we are getting near to the FOMC rate decision. Looking forward, the
uncertainty is very high as we either get a soft or hard landing, but the
weakness in other economies like the Eurozone skews the picture to the worse
scenario.
S&P 500 Technical
Analysis – Daily Timeframe
S&P 500 Daily
On the daily chart, we can see that the S&P 500
recently bounced on the support zone
around the 4455 level but fell back to it last Friday. This is a strong level
as we have also the red 21 moving average adding
extra support. A break to the downside should lead to more selling pressure and
likely take the S&P 500 to the 4328 support.
S&P 500 Technical
Analysis – 4 hour Timeframe
S&P 500 4 hour
On the 4 hour chart, we can see that there’s also
the 50% Fibonacci retracement level
that adds further confluence to the
support zone. The buyers are likely to step in again here with a defined risk
below the level to target a rally into the 4530 resistance.
S&P 500 Technical
Analysis – 1 hour Timeframe
S&P 500 1 hour
On the 1 hour chart, we can see more
closely the key levels on the chart. The buyers will look to buy the 4455
support to target the 4530 resistance and ultimately a breakout. The sellers,
on the other hand, will want to see the price breaking below the 4455 support
to pile in and extend the fall into the 4328 level.
Upcoming Events
This week has just a couple of important economic
releases with the FOMC rate decision on Wednesday being the highlight. The Fed
is expected to keep rates unchanged, and the market will focus more on the Dot
Plot and Fed Chair Powell’s press conference, although he’s likely to repeat
that they remain data dependent. Moving on to Thursday, we will see another US
Jobless Claims report, while on Friday we conclude the week with the US PMIs
data.