foot as the correction that began last week seems to have more room to go. As
of now, the data has been overall positive with the US ISM Manufacturing PMI beating
expectations and US Job Openings missing
forecasts. Moreover, yesterday we got a beat in the US ADP and US Jobless Claims data. If
the data remains positive, we can expect the market to bounce back once the
froth from the aggressive rate cuts expectations gets unwound. Today, is an
important day as we get the release of the US NFP and the US ISM Services PMI.
S&P 500 Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500
yesterday broke below a key support where we
had the confluence of the
recent swing low and the 21 moving average. This
has opened the door for an even bigger drop into the next support around the
4547 level. The sellers should have even more conviction now while the buyers
will need the price to rise back above the 4700 level to regain some control.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the
price has been trading inside a rising channel but the price eventually broke
not only below the lower bound of the channel but also below the key support
around the 4700 level where we had also the 38.2% Fibonacci
retracement level for confluence. We can also notice
that the latest leg higher diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we got a reversal signal and the target should be
right at the 4547 level.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more
closely the current price action with the recent break below the 4700 support.
The sellers should keep piling in around these levels with the lower high
around the 4726 level as the last line of defence. In fact, if the price breaks
above the 4726 level, the recent downtrend would be broken and the buyers
should regain control.
This article was written by FL Contributors at www.forexlive.com.