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.