The S&P500 Futures (CME: ES) trading volume has tapered off ahead of critical economic data set to be released this week. The index has struggled to gain traction in one direction as traders are anticipating economic data to clarify the health of the U.S. economy and the direction the index could take.

Retail sales and industrial production data will highlight today’s economic events. Both metrics are expected to taper off year-on-year, indicating a moderating U.S. economy off its year-by-year peak. The S&P500 Futures will likely be supported if weakness in the U.S. economy abounds due to the reduced likelihood of another interest rate hike. Will the S&P500 Futures move north, or will it be southbound?

Technical

The S&P500 Futures have consolidated sideways in a rectangle pattern, with bulls and bears largely in a balancing act. The consolidation pattern formed midway through the support and resistance range established at the 4070.00 and 4197.50 levels, respectively.

A high volume breakout to either side of the consolidation pattern could prompt a further move in the direction of the breakout. Bullish traders will likely pinpoint the 4197.50 level as a point of interest if a breakout above the pattern ensues. In contrast, a breakout below the pattern could see the 4070.00 level come into play if bears take over market sentiment.

Summary

The S&P500 Futures will likely be sensitive to this week’s economic data. The consolidation pattern could be concluded if the market is surprised by economic data, with either bulls or bears winning the tug of war. The 4070.00 and 4197.50 levels will be the key points to watch as traders could aim for either level if supported by the fundamentals.

Sources: Reuters, TradingView