Last week, we got another set of good economic data for the US with signs of further disinflation in the core inflation measures. The soft-landing narrative should be in full swing with resilient labour market, lower inflation, and lower inflation expectations. Nonetheless, the S&P 500 price action remains rangebound, and at this point it might even be because we are getting near to the FOMC rate decision. Looking forward, the uncertainty is very high as we either get a soft or hard landing, but the weakness in other economies like the Eurozone skews the picture to the worse scenario.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 recently bounced on the support zone around the 4455 level but fell back to it last Friday. This is a strong level as we have also the red 21 moving average adding extra support. A break to the downside should lead to more selling pressure and likely take the S&P 500 to the 4328 support.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that there’s also the 50% Fibonacci retracement level that adds further confluence to the support zone. The buyers are likely to step in again here with a defined risk below the level to target a rally into the 4530 resistance.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the key levels on the chart. The buyers will look to buy the 4455 support to target the 4530 resistance and ultimately a breakout. The sellers, on the other hand, will want to see the price breaking below the 4455 support to pile in and extend the fall into the 4328 level.
This week has just a couple of important economic releases with the FOMC rate decision on Wednesday being the highlight. The Fed is expected to keep rates unchanged, and the market will focus more on the Dot Plot and Fed Chair Powell’s press conference, although he’s likely to repeat that they remain data dependent. Moving on to Thursday, we will see another US Jobless Claims report, while on Friday we conclude the week with the US PMIs data.