S&P 500 Technical Analysis – Key resistance in sight

Last Friday, the NFP report
massively beat forecasts with 336K jobs added against 170K expected. The
unemployment rate remained unchanged at 3.8% and average hourly earnings were a
touch lower. Overall, the market viewed it as a good release with the soft-landing
narrative prevailing. Over the weekend, Hamas launched a big attack
against Israel which might cause some risk aversion in the
markets, although it’s likely to be short-lived as long as the conflict remains
in the Levant.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
rallied from the lower bound of the rising channel following the beat in the
NFP report. The price reached the key support now turned resistance around
the 4331 level where it got rejected into the close. Today, the S&P 500 is
likely to open lower following the Hamas attack against Israel over the
weekend, but as long as the conflict remains confined to Hamas and Israel the
market is likely to ignore the events in the Levant.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price got
rejected into the close from a very strong resistance where we
had also the confluence with the
38.2% Fibonacci retracement level.
The sellers are likely to defend this level and position for further downside
with a defined risk above the level. The buyers, on the other hand, will want
to see the price breaking higher to increase the bullish momentum and target
the downward trendline around
the 4040 level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
had a divergence with
the MACD right
at the bottom of the channel signalling a loss of bearish momentum. In case we
see lower prices today, the buyers are likely to pile in around the previous
swing high around the 4270 level with a defined risk below the low to target
the 4040 level. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish pressure and target new lows.

Upcoming Events

This week we have some important inflation reports. On
Wednesday, we will get the US PPI data and later in the day the FOMC Meeting
Minutes. On Thursday, it will be the time for the main release of the week,
that is the US CPI report, and at the same time we will see the latest Jobless
Claims figures. Finally, on Friday we will get the University of Michigan
Consumer Sentiment report.

See the video below