Today, financial markets in the United States are closed in observance of Independence Day. Investor sentiment was likely buoyed by the latest rally in the S&P 500 index (US SPX 500 mini on FXOpen), which set a new all-time high yesterday, surpassing 6,280.
The bullish momentum has been driven by robust labour market data in the US. According to ForexFactory, analysts had anticipated a rise in the unemployment rate from 4.2% to 4.3%, but instead, it unexpectedly declined to 4.1%.
Can the stock market continue to climb?
Technical Analysis of the S&P 500 Chart
Analysing the 4-hour chart of the S&P 500 index (US SPX 500 mini on FXOpen)on 30 June, we observed the following:
→ An ascending channel was formed (indicated in blue);
→ A developing bullish impulse (marked with an orange line) suggested the price would move towards the upper boundary of the channel – a scenario that materialised with yesterday’s rally (as shown by arrow 1).
However, from a price action perspective, the recent downward move (arrow 2) has now gained significance. It may indicate that sellers are becoming more active around the identified resistance level.
Should the price decline towards the lower orange line, this could negate the current bullish impulse altogether, effectively reflecting a classic bearish engulfing pattern.
Given the above, there is reason to believe that bears are attempting to regain control after the S&P 500 (US SPX 500 mini on FXOpen) surged over 5% in the past 10 days. As such, a potential breakout below the orange line cannot be ruled out, with price action possibly targeting the median of the blue ascending channel.
What happens next?
The market’s trajectory will largely hinge on developments related to tariffs. Trade policy will remain in the spotlight next week, as key deadlines set by the White House approach — events that traders will be closely monitoring.
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