S&P Rallying As US GDP Dips

Stocks Rallying on USD WeaknessUS Stocks are pushing higher today on the back of a further slide in the Dollar yesterday. The greenback came under fresh selling pressure on the back of a lower-than-forecast prelim Q2 GDP number. At 2.1%, the first look at Q2 GDP was below both the prior and expected 2.4% reading and has seen the market pairing back its near-term Fed rate hike expectations. Traders have been struggling over recent weeks to get a strong read on the chances of a September hike. However, with market pricing currently sitting around 90% in favour of an unchanged decision, stocks look to have room to move further north near-term.US Jobs Data on WatchLooking ahead to tomorrow’s jobs data, along with the headline NFP reading, traders will also be looking at the latest wage growth results. If wage growth is seen to have fallen further back last month, this should be strongly bullish for stocks, serving as further evidence that a deflationary trend is taking hold. Such a reading, alongside a lower NFP result, should see the S&P push higher into next week. On the other hand, any surprise upside in tomorrow’s data will no doubt muddy the waters, leading USD higher near-term and fuelling some pullback in stocks.Technical ViewsS&P 500The correction lower from 4627.50 highs has found fresh demand into the 4396.25 level with price since bouncing sharply off the level. Given the overall bull channel, the focus is on a further push higher. However, with strong bearish divergence on momentum studies, the market is at risk of printing a lower high unless bulls can quickly get back above the 4627.50 level, keeping the focus on further upside. In the Signal Centre today we have a sell signal set at 4542 targeting 4393 next.