The S&P 500 Futures (CME: ES) have recently garnered significant attention amidst a backdrop of dynamic market movements. Following a sharp decline in the previous week, the futures rebounded impressively, overcoming a 1.86% loss to close the week on a positive note, posting a modest 45 basis point gain. Notably, this marks the second consecutive week of gains for the index futures.
The positive trajectory came amidst softer-than-expected US jobs data, renewing speculation regarding potential Federal Reserve interest rate cuts in the near future. Against this backdrop, the index futures surged in nearly all S&P 500 sectors post-NFP, led by a remarkable 3% gain in technology but tempered by a slight downturn in the energy sector.
With April’s job report revealing a notable shortfall in employment figures compared to estimates, traders will closely monitor central bank policymaker’s commentary and corporate earnings reports for insights into the market’s direction this week.
Technical
The S&P500 Futures have recently displayed intriguing price dynamics, notably crossing over the 100-day moving average from the downside, signalling a potential sentiment shift favouring the upside.
This shift followed a rebound from support at the 5037.75 level, catalysed by oversold RSI conditions. However, despite the upward momentum, upside volumes have tapered amidst overbought RSI conditions. Subsequently, a minor dip from the 5169.75 level ensued, possibly indicating a resistance point.
Should downside pressures prevail, attention may turn to the 100-day moving average as a potential downside reference. Conversely, a breakout above the 5169.75 level, coupled with high volumes, could signify sustained buying pressures. In such a scenario, the 23.60% Fibonacci Extension level, aligning with a prior swing high, emerges as a potential upside target.
Summary
Amidst a rebound post-NFP, the S&P500 Futures show potential for upside momentum, supported by a crossover of the 100-day moving average. Attention turns to resistance at 5169.75; a breakout could signal sustained buying, while downside pressures may find support at the 100-day moving average. Traders await central bank cues and earnings reports for further insights.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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