Bottom line: SPX500 has managed to hit all-time highs at 3588 yesterday. The indice remains vulnerable for a potential bearish reversal as RSI on the weekly chart is diverging with each new high. A break below 3350 interim support might indicate a potential top is in place.

 Fundamental Outlook:

NZDUSD has managed to hit 0.6790, an eight month high. The risk associated currency pair has been mostly backed by global indices as they continued to rally. The dovish stand by Reserve Bank of New Zealand (RBNZ) had no impact as the exchange rate managed to register new highs against Greenback. Further easing of COVID-19 restrictions may add fuel to the exchange rate.

USDJPY has managed to rally since the beginning of this week and closed higher around 106.17 yesterday. The exchange rate has come under pressure since Prime Minister Abe’s resignation over the last week, citing health issues. The anti-risk Japanese Yen might be under pressure as global equity markets continue to inch higher.

SPX500 managed to print fresh all-time highs around 3588 yesterday. Global equity markets continue to push higher with Dow Jones up +1.59%, DAX higher by +2.07%, FTSE up +1.69%. Asian markets follow as Nikkei is up by +1.35% as we prepare to publish. September is considered to be historically volatile and it would be interesting to see price action unfold further.

Technical Analysis:

SPX500 continues to defy gravity as bulls manage to print yet another high around 3588 levels. Believe it or not, the indice might be close to hitting a major resistance around 3600/10 mark. Bears might remain poised to take control from here and a break below 3350 would encourage.

SPX500 had dropped to 2190 lows in March 2020 which could be a part of a complex corrective structure. Since then, the indice has remained in control of bulls carving a series of higher highs and higher lows through 3588 levels. The rally seems to be an impulse wave which might be close to termination.

SPX500 might be preparing to produce a meaningful corrective drop at least, if not a potential trend reversal from close to 3600/10 levels. Most traders might remain flat for now and allow support at 3350 to be taken out before planning for potential short positions.

Prepared by

Harsh Japee, Technical Analyst.

SPX500 Chart

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