Current trend

During the Asian session, the leading US economic index S&P 500 is developing the “bullish” momentum of the end of last week and is testing 5460.0 for a breakout, renewing the highs of August 1.

The stock market was supported by macroeconomic statistics. The July core producer price index fell from 3.0% to 2.4%, below market expectations of 2.7%, as a result of which the overall annual value reached its lowest since March 2021, and the core value since April 2021, justifying the forecasts of the US Fed. The positive dynamics of the indicator are justified by an increase in housing costs by 0.4% and food costs by 0.2%. Most experts expect that the regulator will adjust the interest rate three times this year, with the first change in September possibly being –50 basis points. On Tuesday, investors took note of the growth of the July business optimism index from the National Federation of Independent Business (NFIB) from 91.5 points to 93.7 points, compared to the forecast of 91.7 points. In addition, by the end of July, the consumer price index adjusted from 3.0% to 2.9% YoY, and the core indicator excluding food products and energy – from 3.3% to 3.2%, signaling a planned economic recovery.

Today at 14:30 (GMT 2), in addition to the traditional statistics on the number of applications for unemployment benefits, data on retail sales is due, which may reflect an increase of 0.3% after zero dynamics earlier, and on industrial production, where the indicator may decrease by 0.3% after an increase of 0.6% earlier.

Support and resistance

On the daily chart, Bollinger bands reverse into a horizontal plane. The price range is slightly narrowing from above, remaining quite spacious for the market activity. The MACD indicator is growing, maintaining a strong buy signal (the histogram is above the signal line), and is trying to consolidate above the zero mark. Stochastic, having reached its highs, is reversing into a horizontal plane, indicating that the index may become overbought in the ultra-short term.

Resistance levels: 5492.8, 5521.6, 5567.1, 5594.9.

Support levels: 5447.7, 5392.4, 5355.0, 5319.8.

Trading tips

Long positions may be opened after a breakout of 5492.8, with the target at 5567.1. Stop loss — 5447.7. Implementation period: 2–3 days.

Short positions may be opened after a rebound from 5492.8 and a breakdown of 5447.7, with the target at 5355.0. Stop loss — 5492.8.