fundamental overview
The S&P 500 broke a key support on Friday and extended losses to new lows as traders avoided weekend risks. Given that nothing happened over the weekend, those fences are being opened today.
The focus is entirely on US-Iran talks and there is some cautious optimism as Pakistan confirmed that talks could take place in Islamabad in the coming days and Trump said they are doing very well and they may reach a deal soon, although he added that they may also fail.
Until we find a solution, the path of least resistance remains in the negative direction. Traders will be keeping a watchful eye on the headlines, and especially on Trump’s Truth social account, as we are always one post away from big market moves.
Trump’s ceasefire expires on April 6, so it is likely that we will get an agreement before then as failure to reach an agreement would significantly increase the risks of a recession.
S&P 500 Technical Analysis – Daily Time Frame
S&P 500 – Daily
On the daily chart, we can see that the S&P 500 again broke key support around the 6,525 level on Friday before eventually bouncing back and extending losses to the 6,363 level. From a risk management perspective, sellers will have a better risk of rewarding the setup around the broken support, which will become resistance to the new low. On the other hand, buyers would like to see prices break higher to extend the pullback into the key trendline.
S&P 500 Technical Analysis – 4 Hour Time Frame
S&P 500 – 4 hours
On the 4-hour chart, we have a small falling trend line defining bearish momentum. Sellers will likely bend the trendline with a defined risk above it to push to new lows, while buyers will look for a break to extend the pullback to the 6,525 resistance level.
S&P 500 Technical Analysis – 1 Hour Time Frame
S&P 500 – 1 Hour
On the 1-hour chart, we can’t add much here as sellers will look for rejection around the trendline, while buyers will look for a break. The red lines define the average daily range for today.
upcoming catalyst
Today we have Fed Chairman Powell speaking. Tomorrow, we will get US Consumer Confidence and US Job Openings data. On Wednesday, we have US ADP, US Retail Sales and US ISM Manufacturing PMI. On Thursday, we will get the latest US jobless claims data. On Friday, we’ll conclude the week with the US NFP report.
