The S&P 500 didn’t react strongly to the release of numbers on inflation, but on Friday 11 August sentiment was somewhat dented by higher producer prices in the USA. These might suggest that the Fed will have to keep rates higher for longer. As for most other markets, there haven’t been any dramatic moves by major American shares this summer so far, with tech and travel-related shares generally remaining strong.
The support in focus remains the 61.8% weekly Fibonacci retracement around 4,350, which was also the limit of the smaller retracement two months ago. It doesn’t seem likely that the price could break through there before activity starts to return later this month and in September unless there are major surprises from the biggest companies still to release earnings reports, including Nvidia, Walmart and Cisco. However, since the price hasn’t clearly broken through the 50 SMA from Bands, it’d be possible to see a bounce in the next few days and a channel forming between 4,450 and 4,600.
The support in focus remains the 61.8% weekly Fibonacci retracement around 4,350, which was also the limit of the smaller retracement two months ago. It doesn’t seem likely that the price could break through there before activity starts to return later this month and in September unless there are major surprises from the biggest companies still to release earnings reports, including Nvidia, Walmart and Cisco. However, since the price hasn’t clearly broken through the 50 SMA from Bands, it’d be possible to see a bounce in the next few days and a channel forming between 4,450 and 4,600.