• SPX500_m up 2% so far this week
  • Incoming US data and Fed speeches could trigger volatility
  • Prices firmly bullish on D1 timeframe but RSI overbought ​​​​​​​
  • Key resistance level found at 4525 ​​​​​​​
  • Possible breakout on horizon

The SPX500_m has gained 2% so far this week thanks to growing investor optimism around the era of Fed hikes coming to an end.

The cooler-than-expected US CPI data on Tuesday boosted bets over the Fed done with raising rates. Yesterday’s soft PPI and retail sales report reinforced these expectations with traders currently pricing in a 25 basis-point rate cut by June 2024. 

We could see some more action on the SPX500_m today due to US economic data, speeches by Fed officials, and quarterly earnings from Walmart released before US markets open.

Taking a look at the technical picture, the SPX500_m could be in the process of another breakout or technical throwback. Prices have created a minor range on the H4 charts with the big resistance at 4525 and minor support at 4490.

Looking at the daily timeframe, bulls have been on a roll over the past few days with the SPX500_m rallying over 7% since the start of November. However, bulls are currently eyeing a significant resistance level at 4525.

Note: the last time prices secured a daily close above this point was at the start of August 2023.

There is a similar theme on the weekly charts with the powerful rebound at the start of November providing a foundation for bulls to test new highs. Beyond 4525, the next resistance can be found at 4600 – near the 2023 high.

Zooming out to the monthly, bulls seem to be regaining momentum with a solid monthly close back above 4600 opening the doors to the all-time high created at the start of 2022. 

Placing our focus back on the daily timeframe, it’s all about the 4525 level.

Prices are trading well above the 50, 100, and 200-day SMA however the Relative Strength Index (RSI) signals that prices are overbought.

  • A strong daily close above 4525 could trigger a move towards 4600.

  • Should prices remain trapped below 4525, prices may decline back towards 4470 and 4410 – where the 100-day SMA resides.