Weekly S&P500 Technical Analysis

<p class=“MsoNormal“>The market keeps on maintaining a positive mood as the recent economic
data were interpreted as good news given the strength in labour market and the easing
in price pressures. </p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.forexlive.com/centralbank/powell-we-need-to-stick-to-our-mandate-20230110/“ target=“_blank“ rel=“nofollow“>Fed
Chair Powell</a> didn’t touch on monetary policy or recent set of
data, removing a risk for the market and giving it more confidence to keep
rallying. </p><p class=“MsoNormal“>We are at a crossroads. </p><p class=“MsoNormal“>On one hand, there’s the risk that the market
is underestimating the Fed’s resolve and the impact that it will have on
the economy. </p><p class=“MsoNormal“>On the other hand, the market is trading on the beliefs that the
recession will be mild, and the Fed will achieve a soft landing. </p><p class=“MsoNormal“>Given
the uncertainty, the technical here can be a guide.</p><p class=“MsoNormal“>S&P500 Technical
the daily chart above, we can see that the price is now testing the major
downward <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“ target=“_blank“ rel=“nofollow“>trendline</a> that defined the 2022 bear market. </p><p>The price was stuck in a range during the
Christmas holidays, but the NFP and ISM Services PMI gave the market the boost
needed to break out of the range and rallying towards the trendline. </p><p>The
bulls need a clear upside breakout to target the major <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistances</a> at 4175 and 4324. </p><p>Another fakeout and a fall below the 3900
level, will give the bears the confidence to target the October 2022 low at
3506.</p><p class=“MsoNormal“>Looking at the 1-hour chart, we can see the recent
catalysts that pushed the market to the upside. </p><p class=“MsoNormal“>The beat in <a target=“_blank“ href=“https://www.forexlive.com/news/us-december-non-farm-payrolls-223k-vs-200k-expected-20230106/“ target=“_blank“ rel=“nofollow“>NFP</a> and the
miss in <a target=“_blank“ href=“https://www.forexlive.com/news/us-december-non-farm-payrolls-223k-vs-200k-expected-20230106/“ target=“_blank“ rel=“nofollow“>AHE</a> and <a target=“_blank“ href=“https://www.forexlive.com/news/ism-december-us-services-496-vs-550-expected-20230106/“ target=“_blank“ rel=“nofollow“>ISM
Services PMI</a>, ignited a strong move to the upside. </p><p class=“MsoNormal“>Once the
market breached the resistance zone at 3920-3940, it pulled back waiting for
Fed Chair Powell. </p><p class=“MsoNormal“>As that risk was removed, the market started rallying again
targeting the blue trendline. </p><p class=“MsoCaption“>Zooming
in to the 15 minutes chart, we can see the hard time that the bulls are
having breaking to the upside. </p><p class=“MsoCaption“>The price may even consolidate here waiting
for another catalyst. </p><p class=“MsoCaption“>The levels are defined though: </p><ul><li>If
the price stays above the 4022 level the bulls are in control.</li><li>If
the price falls back into the range, it would be in no man’s land.</li><li>If the price falls below
3962 level, the bears will regain control.</li></ul>

This article was written by ForexLive at www.forexlive.com.

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