sp 500 declined but still holding above 216055 support 1824252016

Daily Outlook, Tues 02 August 2016 (Click to enlarge charts) What happened earlier/yesterday The U.S. SP 500 Index (proxy for the S&P 500 futures) has […]

Blue avatar for FOREX.com guest contributors
By :  ,  Financial Analyst

Daily Outlook, Tues 02 August 2016

S&P500 (daily)_02 Aug 2016

S&P500 (1 hour)_02 Aug 2016(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has started to slip lower in today’s European session (02 August) from yesterday high of 2183) and printed a current intraday low of 2163 (translated into a decline of 0.9%  from the high of 2183).

This decline came in line with the JGB 10 year yields that has spiked up to -0.06% ( 4th consecutive day of rallies from 27 July 2016 low of -0.291 and renewed JPY’s strength that saw the USD/JPY breached below last Friday’s low of 101.94 (current it is testing the lower limit of the medium-term support of 101.50).

In addition, the Japanese cabinet has approved 4.6 trillion yen in extra spending for the current fiscal which is just a fraction (16%) of the total 28 trillon yen stimulus package announced last week by PM Abe.

Today’s key U.S. economic data releases/events will be as follow:

  • Core Personal Consumption Expenditure for Jun @1230 GMT (0.1% m/m & 1.6% y/y consensus)
  • Personal Income for Jun @1230 GMT (0.3% m/m consensus)

Key elements

  • The Index has slipped back into the 2 weeks plus of range consolidation in place since 14 July 2016 high after yesterday’s intraday breakout above is upper boundary. This is not a positive sign but the Index is still holding above the lower boundary of the range now at 2160.
  • Right below the 2160 range support is this week medium-term pivotal support of 2155 which is defined by a confluence of elements (click here for the details as per highlighted in our latest weekly technical outlook/strategy published yesterday).
  • The daily (medium-term) RSI is now right at its pull-back support (depicted in dotted green) with the shorter-term  (1 hour) Stochastic oscillator has dipped into its oversold region. These observations suggest that a potential turnaround in price action to the upside is likely to occur at this juncture.
  • The near-term resistance stands at 2183 (yesterday’s high) follow by 2194 next (Fibonacci projection cluster).

Key levels (1 to 3 days)

Intermediate support: 2160

Pivot (key support): 2155 (medium-term)

Resistances: 2183 & 2194

Next supports: 2120


The Index is still holding above the 2160/2155 support but it needs to break out fast above 2183 to reignite the bullish tone for a potential rally to target the next resistance at 2194 in the first step.

However, failure to hold above 2155 medium-term pivotal support is likely to invalidate the preferred bullish scenario to see a deeper decline towards the upper limit of the pull-back zone of 2120 that was the former range top that capped all previous advances since May 2015 high.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Related tags:

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar