On the daily chart below, we can see that the range between the 33538 support and the 34477 resistance got finally broken and led to a selloff to the 32684 key support level. The current bias is bearish as economic data in February beat expectations and led the market to price in a higher terminal rate and no cuts by the end of this year.
The soft landing narrative supported the stock market from October 2022 onwards but recently got hit as it looks more likely that we will need some pain in the labour market to get inflation back to the Fed’s target.
On the 4 hour chart below, we can see that the bearish trend is supported by the downward trendline and the moving averages. The hot US PCE report on Friday led to a selloff to the 32684 support and right now we are seeing a pullback probably towards the trendline. That will be a good spot for the sellers to start piling in again barring any notable misses in economic data this week.
In the 1 hour chart below, we can see that the best spot for the sellers will be the confluence between the trendline and the 61.8% Fibonacci retracement level near the 33000 level. That’s also where a previous swing level offered support for the buyers. We can see that the divergence between the price and the MACD into the 32684 support was a signal for the sellers that the momentum was weakening and a pullback was likely.
