S&P 500 Technical Analysis | Forexlive

Fundamental
Overview

The S&P 500 has been on
a great run since last Monday after the dovish Fed’s Bowman comments and the
end of the Israel-Iran conflict. The market continues to be supported by
positive growth and liquidity drivers with financial conditions easing
steadily. The path of least resistance remains to the upside given the
expansionary fiscal policies and impending rate cuts.

In the short-term, the only
risk I can see is a hawkish repricing in interest rates expectations which
could provide a pullback. But given that the Fed’s reaction function remains to
either wait more or cut, the market should eventually get back to its upward
trend.

We have key catalysts in
the next two weeks including the ISM PMIs, the US NFP and the US CPI. The data
will influence interest rates expectations and therefore the S&P 500’s
price action.

To keep the trend going, we
would likely need soft inflation figures and benign labour market data. Since
the market is now leaning more towards three cuts by year-end, hawkish data
would see that being repriced to two cuts.

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 everyday as the
bullish momentum remains intact. From a risk management perspective, the buyers
will have a better risk to reward setup around the previous all-time high at
6,160-ish 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 6,000 level next.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the uptrend. If we were to
get a pullback all the way into the trendline, we can expect the dip-buyers to
lean on it to position for a rally into new all-time highs with a better risk
to reward setup. The sellers, on the other hand, will look for a break lower to
increase the bearish bets into the 5,800 level next.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on this
timeframe. The buyers will likely continue to lean on the trendline to keep
pushing into new highs, while the sellers will look for a break below the
trendline and the 6,160 zone to open the door for a deeper pullback.

Upcoming
Catalysts

Tomorrow, we have the US ISM Manufacturing PMI and the US Job
Openings. On Wednesday, we get the US ADP data. On Thursday, we conclude with
the US NFP, the US Jobless Claims and the US ISM Services PMI before the US
holiday on Friday.