Talking Points
- SPX500 sets April opening range above key Fibonacci support confluence
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Despite all the news regarding the U.S. airstrikes in Syria, the SPX500 maintained its recent range and looks poised to close virtually unchanged on the week. The index has carved out a well-defined monthly opening-range just above confluence Fibonacci support at 2342/44 - a region defined by the 61.8% retracement of the late-March rally & the 100% extension of the decline off the yearly high. Note that this week’s high (also monthly opening-range highs) registered precisely at basic trendline resistance extending off the yearly high and puts the focus on a break of this near-term range.
Chart 1: SPX500 Daily Timeframe (June 2016 to April 2017)
Despite all the news regarding the U.S. airstrikes in Syria, the SPX500 maintained its recent range and looks poised to close virtually unchanged on the week. The index has carved out a well-defined monthly opening-range just above confluence Fibonacci support at 2342/44- a region defined by the 61.8% retracement of the late-March rally & the 100% extension of the decline off the yearly high. Note that this week’s high (also monthly opening-range highs) registered precisely at basic trendline resistance extending off the yearly high and puts the focus on a break of this near-term range.
Chart 2: SPX500 2-hour Timeframe (March 15 to April 7, 2017)
A closer look at price action highlights near-term support at 2340 with immediate resistance seen at the monthly open at 2362 backed by 2370 and confluence resistance at 2378- a breach above this region is needed to mark resumption of the broader up-trend. Bottom line: heading deeper into April trade we’ll be looking for a break of this range with the broader focus weighted to the topside while above 2307/15. From a trading standpoint, I’ll favor fading weakness towards structural support with a breach of the monthly opening-range highs to validate the reversal.
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex contact him at mboutros@dailyfx.com
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