Can the S&P 500 continue to rise from this?
The equity index has created higher lows connected by an ascending trend line on its short-term time frame, as can be seen.
The Fibonacci retracement tool reveals potential areas where more buyers may be present, suggesting that a bullish correction may be imminent.
As it coincides with the pivot point (4,438.30), the 38.2% level appears to be a strong support area, while the 61.8% Fib may be the bottom line for an uptrend retracement.
Considering that the latter is currently just marginally above S1 (4,412.60), the rising trend line, and the 200 SMA dynamic inflection point, it might take some significant bearish pressure to fall below that level and trigger a reversal.
The increase is also expected to continue, according to technical indicators. Stochastic is getting close to the oversold area, indicating that sellers will soon be exhausted, while the 100 SMA is above the 200 SMA, reflecting the presence of bullish feelings.
According to current indications, moves against the dollar are being fueled by unfavourable U.S. data, such as the flash PMIs, which in turn are bolstering risk assets like stocks.
Today's economic releases include data on durable goods orders and first jobless claims, so if more dismal results come in, markets may price in a less hawkish FOMC stance.
If so, the S&P 500 index may be ready to surge again and reach R1 (4,488.70) or even the swing high at 4,474.60.
If you intend to trade this, you'd better pay close attention to soundbites from FOMC members and Powell's address as the Fed chairman.
