Asian Open Traders Increase Net Long USD Exposure to Post Pandemic High

 

What happened last week

The S&P 500 has managed to break above its former intermediate resistance at 1998 and staged a rally to a new historical all-time high at 2019 as expected. Please click on this link for our previous weekly write-up.

Key elements

• The lower boundary of the ascending channel in place since 11 Nov 2012 low is now at 1970 (see weekly & daily charts).
• The 2054/2070 region corresponds with multiple Fibonacci projection levels from various degrees and the upper boundary of the ascending channel in place since 11 November 2012 low (see daily & weekly charts).
• The pull-back support of the long-term former ascending channel in place since March 2009 is at 1900 (see weekly chart).
• The 50-day Moving Average is coming to act as a support at around 1970 (see daily chart)
• The RSI oscillator remains above its trendline support (see daily chart).
• The former intermediate resistance now turns pull-back support at 1998 corresponds with the 23.6% Fibonacci retracement from 08 August 2014 low and lower boundary of the shorter-term term ascending channel (see 4 hour).
• The shorter-term Stochastic oscillator has dipped into the oversold region (see 4 hour chart).

Key levels (1 to 3 weeks)

Intermediate support: 1998

Pivot (key support): 1970/1968

Resistance: 2054/2070

Next support: 1943 & 1900

Conclusion

The multi-month bullish trend remains intact for the S&P 500 even though it staged a decline on last Friday. Based on the above mentioned elements, we expect a further pull-back towards 1998 with a maximum limit set at the 1970/1968 pivotal support before another round of potential upside movement occurs to target the 2054/2070 significant resistance zone.

However, a break below 1970/1968 may negate the bullish tone to see a further decline towards 1943 before the significant support at 1900.

Disclaimer

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