Review and dynamics
While investors continue to await interest rate increase in the USA, the USD is increasing in the financial markets.
Since opening of today’s trading day the index S&P500 has been declining. By mid-April the index S&P500 won back all losses sustained from the beginning of this year and reached new highs at the level of 2108.0. Since early May the index started to decline. On the daily chart two channels have been formed. Annual ascending channel (green color) and monthly channel (purple color). To date, the upper limit of the descending channel is near the level of 2063.0. The lower limit is near the level of 2023.0, which coincides with the strong support level of (ЕМА200, ЕМА144 on the daily chart).
At the moment the price is between the local levels. Breakout either of these level will determine further movement direction in the pair this week. If the price breaks out support level of 2045.0 (ЕМА50 on the daily chart) the index may decline to support level of 2023.0. Breakout of the resistance level of 2054.0 (ЕМА200 on 4-hour chart) and 2063.0 (upper limit of the descending level) may trigger the rise in the index in the ascending channel within a month.
The indicators OsMA and Stochastic give mixed signals. On 4-hour and weekly charts the indicators give signals foe opening short positions, while on the daily chart the indicators are reversing towards the long positions.
The price is still affected by the data indicated last week in the minutes of the Fed meeting.
After breaking out of the level of 2045.0 the price will go to 2023.0 and 2013.0 (ЕМА200 on the weekly chart ) and 2000.0 (Fibonacci 61.8% to the decline since December 2015). If the price consolidates below this level, the pair may go back to the downtrend.
If the price exceeds the level of 2083.0 it will be possible to open long positions, as the index S&P500 is likely to rise in the ascending channel on the daily chart with the upper limit above the level of 2108.0 (highs of 2016). Meanwhile, prior to the meeting of the US Fed on 14-15 June, it is advisable to open short-term positions in the range of 2023.0 and 2083.0 (highs of May).
Support levels: 2045.0, 2023.0, 2013.0 and 2000.0.
Resistance levels: 2054.0, 2060.0, 2083.0, 2100.0 and 2108.0.
Sell Stop: 2044.0. Stop-Loss: 2053.0. Targets: 2023.0, 2013.0, 2000.0 and 1970.0.
Buy Stop: 2059.0. Stop-Loss: 2053.0. Targets: 2063.0, 2083.0, 2100.0 and 2108.0.
Indicators suggest to open short positions