S&P500 declined as expected, will it extend its losses?
“S&P500 snapped out of its recovery, traders adopt wait-and-see approach.”
Bears market continues to exert pressure on equities as Federal Reserve continues to deliver hawkish views. Last week, two Federal Reserve officials commented that interest rates is expected to increase by 75-basis points due to persistent high inflation in the US. Likewise, as Fed and other central bankers is expected to meet this week at Jackson Hole, traders refrain from placing their capital in risky assets, favoring safe havens instead.
Quick recap on S&P500
The index remains traded within a descending channel, signifying selling pressure from the upside.
S&P500 Weekly Technical Analysis
From weekly perspective, while MACD shows persistent bullish signal, overall price action indicates otherwise.
S&P500 Daily Technical Analysis
In terms of daily perspective, the index has recently retraced from the top level of the channel. Nearest support coincides with 200-MA line which will be the key level to focus on in terms of downside.
Trading Idea
ORDER: SELL STOP
ENTRY: 4125
STOP LOSS: 4225
Target 1: 4000
Target 2: 3900
ZFX Analyst’s Comment
Recent price action near the top level of descending channel provides signal for further downside. Nonetheless, a break below the nearest support is required to support such hypothesis.
—
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
ZFX (Zeal Capital Market) is an FCA & FSA licensed online Forex & CFD broker providing more than 100 products for Forex, commodities, stock indices, and share CFDs. Open a trading account with min. USD 50 deposit and download our MT4 trading platform now!