S&P 500 Technical Analysis

Yesterday,
the S&P 500 ended the day negative as the relief rally reached some key
resistance levels. The first part of the week has been pretty empty on the data
front, and we hadn’t any Fedspeak due to the blackout period. This has led to a
relief rally which was exacerbated by weaker US PMIs as the
market interpreted them as good news for inflation, although there were some
worrying commentary on the labour market side. Beginning today, we will have
many top tier economic data ahead as the new month comes with new reports.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
is
trading near a 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 the
relief rally found some resistance around the 38.2% Fibonacci retracement level
where we have also the red 21 moving average for confluence. These two levels
will be the entry points for the sellers as a break above them should trigger
an even stronger rally and invalidate the bearish setup. There’s not much else
we can glean from this chart, so we need to zoom in to see some more details.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor support zone around the 5042 level where we can also find the red
21 moving average for confluence. If the price pulls back to the zone, the
buyers will look to buy the dip as they will have a better risk to reward setup
to target new highs. The sellers, on the other hand, will want to see the price
breaking lower to confirm a reversal and increase the bearish bets into new
lows.

Upcoming Events

Today we get the US Q1 GDP and the latest US Jobless
Claims figures. Tomorrow, we conclude the week with the US PCE report.

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