We bottomed on April 9 when we reached the peak in escalation and Trump paused the tariffs for 90 days. From there on, it was starting to look clear that the downside became limited, and the upside was the most likely path forward.
On the daily chart, we can see that the S&P 500 bottomed right near the key support zone around the 4800 level which had the confluence of a major trendline and the 2022 high. The price is now coming back to retest the key resistance zone around the 5510 level where we have the downward trendline for confluence. That's where we can expect the sellers to step in again to position for a drop back into the support. The buyers, on the other hand, will look for a break higher to invalidate the bearish setup and increase the bullish bets into a new all-time high.
Maybe, we close that gap if the price pulls back to the minor upward trendline where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 5145 level next.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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