The S&P is currently sitting in extreme overbought territory (95–96%), while the MACD continues to trend higher. This combination typically signals a short-term pullback within a broader bullish structure.
Key takeaways and strategy
- We remain in a buy-the-dips environment following the break of the rounding top formation.
- However, multi-timeframe overbought conditions (Weekly & Monthly) suggest a classic exhaustion phase is approaching.
Support zones to watch
7026 – 6996 – Primary dip-buying region.
6955 – Deeper support if momentum fades.
6782 / 6741 – Cluster of moving averages.
6707 – Critical 200-day moving average.
Resistance and upside levels
Daily Pivot: 7131 (current trading level).
R1: 7177.
R2: 7206.
R3: 7232.
Trend channel top: 7280.
Fib extension (23.6%): 7352.
Outlook
As we push into uncharted territory, Pivot Points and Fibonacci extensions become key for identifying resistance.
A controlled pullback over the coming sessions would be constructive before any sustained move higher.
Holding above the Daily Pivot (7131) keeps the bullish structure intact. A failure below opens the door for a deeper retracement toward key support levels.
All eyes now shift to the US session, where volatility is likely to pick up and define the next move.
This remains a tactical market — disciplined positioning is key.
Source: https://www.fxstreet.com/news/sp-500-beginning-to-look-overbought-202604210701
