Fundamental
Overview
The S&P 500 has been on
a sustained rally ever since the last FOMC decision with the market continuing
to price in a back-to-back 50 bps cut in November. More recently, the PBoC
surprised with strong easing measures as Chinese officials seem to have finally
decided to go bigger. The market might now looking forward to a pick-up in global
growth.
On the economic data side, the
latest US consumer confidence surprised to the downside with worrying labour
market data, but the market quickly faded the reaction. One possible reason
could be that the data didn’t incorporate the latest Fed’s decision so the
market might want to wait a bit more to see if things pick up in the next
months.
S&P 500
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the S&P 500 continues to print new all-time highs supported by the
dovish market pricing and more recently the strong Chinese easing measures.
From a risk management perspective, the buyers will have a better risk to
reward setup around the previous all-time high around the 5720 level. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the trendline.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we had some consolidation recently around the highs but the price
broke out overnight and extended the gains into new highs. If we get a
pullback, the buyers will likely step in around the 5800 level to position for
the continuation of the uptrend. The sellers, on the other hand, will want to
see the price breaking lower to pile in for a drop into the 5720 level.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see more clearly the recent price action with the breakout of the ascending
triangle overnight. There’s not much else to add as the buyers will want to
wait for a pullback, while the sellers will look for the price falling back
below the 5800 level to invalidate the bullish setup and position for the drop
into the 5720 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude
the week with the US PCE report.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
