Technical Analysis


Fundamental
Overview

After a couple of weeks of
consolidation, the S&P 500 this week found some footing and eventually
extended the rally into a new all-time high following the soft US Jobless Claims and ISM Services PMI reports.

Overall, the data didn’t
change much in terms of interest rates expectations, but it reinforced the view
that the Fed is going to deliver at least two rate cuts by the end of the year.
The soft-landing narrative is still the main driver of the market, and the data
is indeed backing it for now with ongoing disinflation and resilient economy as
we head into the easing cycle.

S&P 500
Technical Analysis – Daily Timeframe

S&P 500 Daily

On the daily chart, we can
see that after two weeks of consolidation, the S&P 500 reached a new all-time
high following some soft US data. From a risk management perspective, the
buyers will have a better risk to reward setup around the trendline. At the moment though, it’s hard to
envision such a big pullback unless we get some ugly US data.

S&P 500 Technical
Analysis – 4 hour Timeframe

S&P 500 4 hour

On the 4 hour chart, we can
see more clearly the rangebound price action of the last couple of weeks with
the recent breakout. This is where the buyers are stepping in with a defined
risk below the resistance
now turned support
to position for a rally into new highs. The sellers, on
the other hand, will want to see the price falling back inside the range to
position for a drop into the 5500 support.

S&P 500 Technical
Analysis – 1 hour Timeframe

S&P 500 1 hour

On the 1 hour chart, we can
see that we have a bit of consolidation now around the 5587 level as the market
awaits the US NFP report. If we get bad data, the market might go into risk-off
and we will likely see the sellers piling in aggressively for a selloff into
the 5500 support.

The buyers will want to see
a good or benign report which could even lead to a dip-buying opportunity on a possible
pullback into the 5560 zone. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report where the data is expected
to show 190K jobs added in June and the Unemployment Rate to remain unchanged
at 4.0%.



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