the market continues to trade into the CPI release today probably expecting good
inflation figures. This raises the risk of a bigger selloff in case the data
surprises to the upside given that we should also see Treasury yields rising
and the aggressive rate cuts expectations getting trimmed. At the same time, we
will see the latest Jobless Claims figures and that will also be something to
factor in as strong numbers might double down on a hot CPI report. The
best-case scenario for the S&P 500 is probably benign inflation data and
not too weak Jobless Claims.
S&P 500 Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500
eventually bounced on the swing level around the 4700 level where we had also
the red 21 moving average for confluence. The
price is now approaching the all-time high and we might see it breaking it
today with the key economic data releases on the agenda. The sellers are likely
to step in around the all-time high with a defined risk above it to position
for a drop back into the 4700 level.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can notice that
we will likely see the price diverging with
the MACD right
at the all-time high. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. This is another bearish confluence for the
sellers and should give them a bit more conviction, although the data might
invalidate the setup. The buyers, on the other hand, will likely increase the
bullish bets on a break of the all-time high.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more
closely the current price action and we can see that we have a minor trendline
defining the current bullish momentum. If the price spikes to the upside and
then breaks below the trendline, we can expect the sellers to increase the
bearish bets into the 4700 support. The
buyers, on the other hand, will likely lean on the trendline and the 21 moving
average to position for another rally.
This article was written by FL Contributors at www.forexlive.com.