Investors eagerly anticipate guidance from the Federal Reserve after Friday's jobs report showed lower-than-expected results. The unemployment rate has risen to 3.9%, while average hourly earnings increased by 0.2%, and only 175K jobs were added. Despite this, traders are expecting a rate cut in September this year. The US Dollar is bouncing off the 50-period Exponential Moving Average while the SP500 is rallying above the key support level of 5122.60
Traders will be keeping a close eye on significant economic data that could affect the economy's health, due to be released.
Overview
Investors eagerly anticipate guidance from the Federal Reserve after Friday's jobs report showed lower-than-expected results. The unemployment rate has risen to 3.9%, while average hourly earnings increased by 0.2%, and only 175K jobs were added. Despite this, traders are expecting a rate cut in September this year. The US Dollar is bouncing off the 50-period Exponential Moving Average while the SP500 is rallying above the key support level of 5122.60
Traders will be keeping a close eye on significant economic data that could affect the economy's health, due to be released.
High Impact Economic Events
Thursday 11:00 am (GMT+0): Official Bank Rate (GBP)
Thursday 12:30 pm (GMT+0): Unemployment Claims (USD)
Thursday 05:01 pm (GMT+0): 30-y Bond Auction (USD)
Friday 06:00 am (GMT+0): GDP m/m (GBP)
Friday 12:30 pm (GMT+0): Nonfarm Employment Change (USD)
Friday 12:30 pm (GMT+0): Unemployment Rate (CAD)
Friday 02:00 pm (GMT+0): Prelim UoM Consumer Sentiment (USD)
Technical Analysis
The S&P 500 Index has increased significantly since April 19, when it bounced off a daily low of 4926.10. Specifically, the SP500 formed a technical reversal to the upside, known as a failure swing. Notably, the trough at 5008.30 failed to move lower than the previous trough, 4926.10, and instead, prices exceeded the peak of 5122.60, paving the way for an upward trajectory.
Both the Moving Average and the Momentum oscillator are in agreement with the bullish scenario. More specifically, the S&P 500 prices trade above the 50-period Exponential Moving Average line, and the Momentum oscillator remains above its 100 baseline.
Potential Upside Targets
If the bulls manage to maintain control of the SP&500 market, traders may consider the following three potential upside targets:
5226.20: The initial resistance stands at 5226.20, aligning with the R2 resistance of the weekly Pivot Points methodology.
5275.70: The second price objective is seen at 5275.70, corresponding to the peak marked on March 31.
5308.42: An additional potential price objective could be identified at 5308.42, representing the 261.8 percent Fibonacci Extension drawn from the swing high 5122.60 down to the swing low 5008.30.
Potential Downside Targets
Should the bears take control of the SP&500, traders may consider the following three potential downside targets:
5122.60: The initial target stands at 5122.60, aligning with the peak formed on April 29.
5048.70: The second potential support is found at 5048.70, corresponding to the S1 support weekly Pivot Point.
4296.10: An additional potential support could be identified at 4296.10, representing the trough marked on April 19.
Conclusion and Considerations
The current positive momentum, propelled by growing anticipation of Fed rate cuts this year, a subdued NFP reading, and geopolitical turbulence, pulled the S&P 500 to stage a rally. Moreover, keeping up-to-date with economic events and geopolitical changes will be crucial in making informed trading choices in the financial markets.