Markets were reminded once again last week how quickly geopolitical risks can return. From a technical perspective, S&P 500 Index (^SPX) futures recovered from the initial selloff – but markets remain wary of a prolonged period of elevated oil prices, notes Fawaz Razaqzada, technical analyst at TradingCandles.
Buyers stepped in around the 7,500 area after the initial selloff. The rebound was encouraging. But it carried the market into an important resistance region between roughly 7,540 and 7,578 – an area that previously acted as support before giving way.
S&P 500 Futures
A sustained move above this zone would improve the short-term technical picture and could allow the index to retest the recent highs between 7,632 and 7,648. Beyond that, the next bullish objective sits near 7,732, representing the 200% Fibonacci extension of the January-to-March decline.
On the downside, however, 7,500 remains the first level to watch. A decisive break below there would place the 21-day exponential moving average back under pressure and increase the likelihood of a deeper pullback.
Further support lies around 7,450, followed by 7,354, a level that marked the breakout point during June’s rally. Losing that support would significantly weaken the near-term outlook and expose the previous swing low around 7,232.
Should selling accelerate beyond that point, attention would then turn towards the psychologically important 7,000 region.
