Review and dynamics
Since mid-April, when the index S&P500 had reached annual highs at the level of 2108.0, regaining all losses sustained from the beginning of the year, the index is undergoing correction in the ascending channel on the daily chart.
Downward correction stopped last Friday after the release of US labor market statistics for April, which was weaker than expected. It became known that new jobs in April amounted to 160 000 instead of the expected rise on 200 000 and the rise of 208 000 in March. This data has lowered expectations of the interest rate increase in the USA. The price has rebound from support level of 2041.0, which is crossed by ЕМА50 and the lower line of the ascending channel on the daily chart. Yesterday, the rise in index was the highest in the last month. The index grew by 1.2% or 25.7 points.
On the daily chart the indicators OsMA and Stochastic recommend to open long positions. However, the indicators on 4-hour chart are reversing towards the short positions.
If the indicators on 4-hour chart give signals to open long positions, it will be advisable to place buy orders. Pending buy orders can be placed at support levels of 2064.0 (ЕМА144), 2056.0 (ЕМА200 on 4-hour chart), 2041.0 (ЕМА50 and lower line of the ascending channel on the daily chart). The target of the rise may be the level of 2108.0.
As an alternative scenario the pair can break out support level of 2041.0 with the target of 2023.0 (ЕМА200 and ЕМА144 on the daily chart). Breakout of the strongest support level of 2000.0 (Fibonacci 61.8% to the decline since December 2015), may provoke further decline in the pair. In this case the pair will return to the downtrend.
Long positions are preferable.
Breakout of the resistance zone at the level of 2083.0 will trigger further rise up in the index S&P500.
Support levels: 2064.0, 2056.0, 2041.0, 2023.0 and 2000.0.
Resistance levels: 2083.0, 2100.0 and 2108.0.
Sell Stop: 2070.0. Stop-Loss: 2083.0. Targets: 2064.0, 2056.0, 2041.0, 2023.0 and 2000.0.
Buy Stop: 2085.0. Stop-Loss: 2075.0. Targets: 2100.0 and 2108.0.
In the ascending channel
Indicators are reversing towards short positions