Piece written by Alexa Smith, Trive Financial Market Analyst 

The release of Durable Goods Orders yesterday sent the S&P 500 Futures (CME: ES) into a frenzy as US Treasury Yields soared, seeing the Greenback take flight. Durable Goods Orders in the US revealed an increase of 0.2% for August, starkly contrasting July’s 5.6% drop and setting the tone for further interest rate hikes from the Federal Reserve to curb rising inflation. 

According to CME’s FedWatch tool, market expectations indicated a 77% probability of the benchmark interest rate remaining unchanged in November and a 58% likelihood of the same outcome in December. Conversely, there was a growing consensus for a 25-basis-point rate cut, with probabilities increasing to over 31% in both June and July. These developments could aid the Futures in reaffirming an uptrend if they come to light. Meanwhile, market participants are eagerly awaiting the release of US GDP Growth and initial jobless claims data, seeking insight into the vigour of the US economy. Adding to the complexity, Federal Chair Jerome Powell’s speech is expected today while PCE Price Index Data and a partial government shutdown hang in the balance.   

Technische Analyse 

The 50-day moving average diverging further from the 100-day moving average paved the way for a pullback towards the 4286.75 support, marking a 3-month low. With rising selling volume, the S&P 500 Futures may have to endure a pullback towards the 4286.75 support, which could pave the way towards lower support levels if broken down.  

However, oversold levels may lead to a slight retracement towards the 4361.50 level. In this case, a breakdown may bolster the index futures towards the 4506.25 resistance at the 78.60% Fibonacci Retracement.  

Zusammenfassung 

The S&P 500 Futures edged lower ahead of macroeconomic data releases, which could sway the Federal Reserve in favour of a hike. If selling volume continues to increase, the price action may attempt to retest the 4286.75 support. However, oversold conditions encourage a slight retracement towards the 4361.50 level. 

Sources: TradingView, Reuters