Investors are bracing for another volatile session as markets digest a string of key economic updates due Thursday, including Australia's employment report, the European Central Bank's interest rate decision, and US jobless claims. Meanwhile, the S&P 500 continues to trade under pressure, extending its decline by more than 20% from its February peak. With the index showing clear signs of a bearish trend—marked by a death cross and weakening momentum indicators—traders are closely watching for any signs of stabilization or deeper downside risk. Upcoming macro data may prove pivotal in shaping sentiment and direction in the days ahead.
Overview
Investors are bracing for another volatile session as markets digest a string of key economic updates due Thursday, including Australia's employment report, the European Central Bank's interest rate decision, and US jobless claims. Meanwhile, the S&P 500 continues to trade under pressure, extending its decline by more than 20% from its February peak. With the index showing clear signs of a bearish trend—marked by a death cross and weakening momentum indicators—traders are closely watching for any signs of stabilization or deeper downside risk. Upcoming macro data may prove pivotal in shaping sentiment and direction in the days ahead.
Key Economic Events
Thursday 04:30 am (GMT+3) - Australia: Employment Change (AUD)
Thursday 15:15 (GMT+3) - Europe: Main Refinancing Rate (EUR)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Technical Analysis
Since reaching a high of 6143.58 on February 19, the S&P 500 Index has exhibited a strong bearish momentum, declining over 20% (peak to trough) and forming a consistent pattern of lower highs and lower lows—hallmarks of a sustained downtrend.
The initial reversal was signaled by a Shooting Star candlestick pattern, indicating diminishing buying pressure. This shift was further validated by the formation of a failure swing reversal pattern, where the peak at 5788.00 held below its predecessor before price action decisively broke below the 5504.41 swing low.
Additional technical confirmation emerged as the S&P 500 breached the 200-period Exponential Moving Average (EMA), reinforcing bearish sentiment and decreasing investor confidence. The emergence of a "Death Cross," with the 50-period EMA crossing below the 200-period EMA, further intensified the bearish case, suggesting growing downside momentum.
Momentum indicators continue to support the bearish outlook. The Momentum oscillator has dropped below the 100 threshold, while the Relative Strength Index (RSI) remains firmly below 50, signaling sustained selling interest and reinforcing the pair's downward trajectory.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential res stance levels below:
5491.90: The initial resistance is 5491.90, which represents the daily high reached on April 9.
5632.85: The second price target is identified at 5632.85, corresponding to the 61.8% Fibonacci Retracement drawn from the high point, 6143.58, to the low point, 4806.60.
5788.00: The third target is established at 5788.00, aligning with the high reached on March 26.
6143.58: An additional price target is estimated at 6143.58, which corresponds to the daily high marked February 19.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
5219.33: The first level of support is identified at 5219.33, representing the weekly Pivot Point, PP, estimated using the standard methodology.
5122.13: The second support level is 5122.13, reflecting the 23.6% Fibonacci Retracement drawn from the high point, 6143.58, to the low point, 4806.60.
4946.77: The third support level is identified at 4946.77, corresponding to the weekly support, S1, estimated using the standard Pivot Points methodology.
4806.60: An additional downward target is observed at 4806.60, corresponding to the swing low from April 6.
Fundamentals
The S&P 500 might still have more room to fall—possibly another 10% to 20%. Even after this year's pullback, the market still looks expensive when compared to past levels, especially from mid-2022 when interest rates started rising sharply. While company earnings have gone up a bit, stock prices have gone up even more, making things look overvalued. History also shows that during tough economic times, the market usually falls a lot more than it has so far in 2025. So, unless earnings rise a lot, another drop wouldn't be surprising.
The S&P 500 has formed its first "death cross" since March 2022, a technical pattern that occurs when the 50-day moving average falls below the 200-day average—often seen as a sign of potential weakness. While historically, this has sometimes led to further short-term declines, past data shows that markets often recover in the months that follow. Analysts are split: some see the pattern as a warning of a possible retest of recent lows, while others believe it may signal a rebound is near. Despite the signal, US stocks ended Wednesday lower.
Conclusion
With the S&P 500 having dropped more than 20% and technical signals pointing to continued weakness, markets are clearly on edge. Thursday's economic releases—from employment data in Australia to central bank decisions in Europe and jobless claims in the US—could be key in shaping near-term sentiment. While the broader trend remains bearish, traders will be watching closely for signs of either deeper downside or a potential bounce. Until the macro picture becomes clearer, volatility is likely to remain elevated.