S&P 500: Technical outlook and review

Aaron Hill FP Markets

S&P 500 chalks up largest one-month gain since mid-2022

November finished higher by nearly 9.0%; it was a cracking month for the S&P 500, chalking up its largest one-month gain since July 2022 and closing on the doorstep of the 4,607 top printed in July. You will note that from the monthly timeframe, we can see that the Index is entrenched within a longer-term uptrend, and a break beyond 4,607 could pave the way to the all-time high of 4,818.

According to the weekly chart, the week finished shaking hands with a resistance level of 4,595, a base the Research Team have banged the drum for over the past couple of weeks. If we clear offers around this level this week, space to explore higher terrain throws resistance at 4,743 into the mix as potential resistance in the coming weeks, sheltered just south of 4,818.

The Relative Strength Index (RSI) on both the monthly and weekly charts indicate positive momentum (> 50.00) and exhibit room to push higher until reaching overbought conditions.

Moving across to the daily timeframe, price action helped reaffirm the bullish presence by rupturing resistance at 4,578 last week (now a marked support level). This followed a retest of support at 4,541, as was noted as a possibility in last week’s week-ahead post. Subsequent buying exposes the 4,607 top (circled) mentioned above on the monthly timeframe, followed by daily resistance at 4,653.

Going forward

While there is certainly a ceiling of resistance for buyers to contend with this week: weekly resistance at 4,595 and the July peak at 4,607, the strength of buyers is hard to overlook. As a result, any retest seen at daily support from 4,578 this week could bolster dip buying. Additionally, a breakout beyond 4,607/4.595 resistance may encourage further upside towards daily resistance at 4,653.

Charts: TradingView

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.