Today at 15:30 GMT+3, the Consumer Price Index (CPI) report will be released.
In anticipation of the figures, traders remain optimistic – the S&P 500 index (US SPX 500 mini on FXOpen) reached a new all-time high yesterday, climbing above 6,560 points.
The bullish sentiment is driven by:
→ Expectations of an interest rate cut in September, which is believed to provide a positive boost to the US economy (and increase corporate profits).
→ A sharp rally in Oracle (ORCL) shares. The company announced it had signed four multibillion-dollar contracts with three different clients.
Technical Analysis of the S&P 500
On the 4-hour chart of the S&P 500 index (US SPX 500 mini on FXOpen), the price continues to move within an ascending channel, shown in blue.
From a bearish perspective:
→ the price is near the upper boundary of the channel, which has acted as resistance for several weeks;
→ the RSI indicator is close to the overbought zone, which may discourage buyers from entering at higher prices;
→ yesterday’s candle had a long upper shadow (marked with an arrow), indicating increased selling pressure.
From a bullish perspective:
→ the local level of 6,520, after being broken, has switched from resistance to support;
→ in September, the price has followed a steep upward trajectory (marked with orange lines), with the lower line showing signs of support.
Taking this into account, we could assume that the market is in a short-term state of balance while awaiting the release of inflation data – arguably the key event of the week in the economic calendar.
Favourable figures could encourage the bulls to attempt a breakout above the upper boundary of the channel, lifting the S&P 500 to a new all-time high. Be prepared for spikes in volatility.
