The S&P 500 saw a strong bounce last week after positive US Jobless Claims figures calmed fears about the labor market following a weak US NFP report. This has led to a decrease in expectations for rate cuts, with a 25 bps cut now seen as more likely than a 50 bps cut in September. Additionally, Japanese officials have indicated they will not tighten monetary policy further due to recent market volatility, contributing to a more positive market sentiment.
Looking at the technical analysis, on the daily chart, the S&P 500 is approaching a key resistance level around 5430, where the 61.8% Fibonacci retracement level also lies. Sellers may step in at this level, while buyers will look for a breakout above this resistance level to target a major trendline breakout.
On the 4-hour chart, the price has broken above strong resistance at 5366, with buyers entering the market. However, there is some caution ahead of the US CPI report. Buyers may look to the upward trendline at 5270 for support, while sellers will aim for a break below this level.
The 1-hour chart provides a closer look at recent price action, with little insight for market participants until key levels are reached or catalysts occur. Upcoming catalysts include the US PPI data, US CPI report, US Retail Sales, Jobless Claims figures, and the University of Michigan Consumer Sentiment survey throughout the week.
In conclusion, the S&P 500 has shown resilience and positive momentum following recent economic data and market developments. Traders will closely monitor key resistance levels and upcoming economic reports for further direction in the market.
