On the daily chart below, we can see that the price couldn’t break out of the strong resistance at 4175 as the incredibly strong NFP report pushed the price lower on renewed expectations of the Fed being forced to go higher than their projected terminal rate. The price pulled back to the nearest support defined by the upward-sloping trendline and the red moving average. It’s highly likely that we will see a choppy price action going into the tomorrow’s CPI report.
In the 4 hour chart below, we can see that the price bounced near the trendline and the daily moving average to the nearest resistance at 4108. That level will most likely keep the price lower while the market awaits the economic data. On this lower timeframe we can also see that the moving averages are now pointing south, so that’s going to be a good resistance in case the CPI tomorrow beats expectations and sellers start to pile in.
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In the 1 hour chart below, we can see that the price is now below the range created after the strong NFP report. You can feel the uncertainty in the market given that we have renewed fears of inflation and more hikes and the hope for a soft landing as labour market remains strong but wages cool down. On the upside move the price stalled at the 4108 resistance and the 38.2% Fibonacci retracement level. The CPI report tomorrow will decide the next move. A beat should send the market lower and break out of the blue trendline, while a miss should see the price breaking higher and target again the 4175 resistance or higher.
