Underpinned by Federal Reserve Rate Cut ExpectationsUnderpinned by Federal Reserve Rate Cut Expectations
South African rand rally falters amid market consolidation By Investing.comSouth African rand rally falters amid market consolidation By Investing.com

The S&P 500 surged to new highs following the
miss in the US CPI report.
Looks like the market is still trading based on the inflation and interest
rates expectations and ignoring the softening in the labour market and growth
data. Yesterday, the US Retail Sales were
more tepid compared to the prior months, but they still came out better than
expected, and the US PPI data
missed forecasts by a big margin across the board. The bears are having a hard
time to fight this positive sentiment and perhaps it will take a clear uptrend
in the unemployment rate to switch the market’s focus.

S&P 500 Technical
Analysis – Daily Timeframe

S&P 500 Daily

On the daily chart, we can see that the S&P 500
broke above the key trendline
following the miss in the US CPI and it’s now near a swing point resistance. This
rally looks overstretched as depicted by the price distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

S&P 500 Technical
Analysis – 4 hour Timeframe

S&P 500 4 hour

On the 4 hour chart, we can see that in case of a
pullback the buyers might want to lean on the upward trendline where they will
also find the blue 8 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets and position for a drop into the 4400 support.

S&P 500 Technical
Analysis – 1 hour Timeframe

S&P 500 1 hour

On the 1 hour chart, we can see that the
price is diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the buyers will also find the 38.2% Fibonacci
level around the trendline for further
confluence. If the price breaks below the trendline, the bullish setup would be
invalidated and the reversal into the 4400 support would be confirmed.

Upcoming Events

Today the market’s focus will be on the latest US
Jobless Claims figures given the recent softening in the labour market data.

See the video below

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