FundamentalOverview

This week has been allabout tariffs. On Monday we opened with a big gap lower as Trump followed throughwith his tariffs threats and imposed them on Canada, Mexico and China over theweekend.

As it’s been the case forprevious tariffs actions though, the market started to cautiously fade thereaction in expectation of some kind of a deal. That’s exactly what happened aswe got the news on Monday afternoon that the tariffs on Mexico were paused for30 days after positive negotiations.

The market bounced back immediately,and the bulls started to build their positions with more conviction. There’sstill the question with China but given that China’s response has been very softand we haven’t got any negative news yet, the market is keeping with theoptimism.

The focus now switched tothe US NFP report tomorrow. The labour market data throughout January has beengood, so we might see an overall good NFP report as well. The focus remains oninflation for the Fed, so even if we get a strong NFP, it shouldn’t change theFed’s stance and two rate cuts by the end of the year will continue to remainthe baseline.

S&P 500Technical Analysis – Daily Timeframe

On the daily chart, we cansee that the S&P 500 has been stuck in a big range for three months now.The market participants will continue to play the range until we get a breakouton either side as that will likely increase the momentum and give us the nextimpulse.

S&P 500 TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we have a smaller range between the 5960 supportand the 6150 resistance. This could be a signal that overall, the bullish viewis more probable and that the buyers remain in control. Again, there’s not muchwe can say here as what we need is a breakout.

S&P 500 TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a nice support zone around the 6070 level where we can alsofind the upward trendline for confluence.If we get a pullback into the support, we can expect the buyers to step in witha defined risk below the trendline to position for the break above theresistance. The sellers, on the other hand, will want to see the price breakinglower to target a deeper pullback into the 5960 support next. The red linesdefine the average daily range for today.

UpcomingCatalysts

Today we get the latest US Jobless Claims figures, while tomorrowwe conclude the week with the US NFP report.