Having tested the 7340 resistance level during Monday night, I was expecting to see it retested in hours, especially as the bulls had managed to push past the 7328 resistance level. I did think that any dip down to the 7265 level would hold and present a good "buy the dip" spot, but the bears scuppered that idea. It now looks pretty bearish with the 7290 level as resistance on the 2 hour chart, and the bulls failure to break above the 25ema on the daily (the 7340 resistance level).
The drop was due to more hawkish comments from Fed chair Jerome Powell. Powell opened the door to the Federal Reserve raising U.S. interest rates four times this year as he acknowledged stronger economic growth may prompt policy makers to rethink their plan for three hikes. He said he expects the next two years to be strong for the economy and that his personal outlook for growth has firmed since December.
For today we initially have some support at S1 and the fib level at 7220. As mentioned above the 2 hour chart has now gone bearish and has resistance at 7290 so if we get a rise to this area it looks like it is worth a short here. The bulls failed to build on Mondays rises, and the question today will be if they can shake off yesterdays pessimism. They managed to do that last week after a day of declines, so watching to see if they can drive it up this morning. We have yesterdays close at 7282 so may well see a gap close if we climb towards that area.
There is an 8.5 point dividend to be applied later today, not massive but may just see some dividend hunter buying as we approach the close.