Markets spent the weekend trapped in another troubling cycle: expectations of de-escalation, fresh US-Iran strikes, then another stand-down and renewed talk of negotiations.Each headline changed the risk picture without resolving the conflict. For now, investors appear to be treating the situation as contained rather than concluded.That was enough to help Wall Street recover from last week’s hard sell-off. The rebound is welcome, especially across technology, but relief rallies are easiest near the lows. The harder test begins when price returns to broken support, moving averages, and the fundamental pressures that caused the decline.Bullish Divergence Helped Trigger the RecoveryBoth USTEC and US500, Nasdaq and S&P 500 CFDs, formed four-hour bullish RSI divergences near last week’s lows.A bullish divergence appears when price makes a lower low while RSI forms a higher low. It suggests that selling momentum is weakening, although it does not guarantee that the trend has reversed.Both CFD indices have since reclaimed their four-hour 200 EMA, giving the recovery a stronger technical base.Nasdaq (USTEC) 4H Chart:S&P 500 (US500) 4H Chart:The next issue is overhead resistance.USTEC is already testing the lower edge of its first resistance zone. A clean move through 29,945, followed by a successful retest, would make the recovery more convincing.US500 has also improved, but it still faces several layers of support and resistance. The falling trendline around 7,520–7,540 may be the more important test.If both indices hold their reclaimed 200 EMA bands and clear their first resistance zones, the rally begins to look broader than a short-covering bounce.If they fall back below those moving averages, last week’s downtrend remains in control.The Magnificent Seven Are Bouncing TooThe Roundhill Magnificent Seven ETF (NYSE:MAGS) has rebounded from its 61.8% retracement near 61.20, supported by another four-hour bullish divergence.Alphabet (NASDAQ:GOOGL), Tesla (NASDAQ:TSLA) and Amazon (NASDAQ:AMZN) are showing similar momentum improvements. In each case, RSI held or formed a higher low while price retested lower levels.However, most of these stocks remain underneath important EMA resistance.This is why the MAGS chart matters.The large technology stocks are participating in the rebound, but most are only now reaching the moving averages that broke during the sell-off. Until those bands are reclaimed, they remain resistance.The recovery therefore has breadth, but it has not yet repaired the trend.Why the Rally Could Still Be RejectedThe geopolitical situation has calmed, but it remains fragile. Another round of attacks or a formal breakdown in negotiations could quickly lift oil, inflation expectations and defensive demand for the dollar.Inflation is also still a problem. May PCE inflation reached 4.1%, while core PCE rose to 3.4%. That leaves the Federal Reserve with little reason to support markets through easier policy.The AI trade has its own unresolved pressure. Strong memory demand is good for semiconductor suppliers, but rising component prices can squeeze the margins of the companies purchasing those chips. They must either absorb the costs, raise product prices or reduce investment.None of those choices is especially comfortable for expensive technology stocks.The Next Three Sessions Will Test the BounceMonday’s rally developed during a quiet US data window. That can change quickly during this week.The ideal payroll result would be a moderate slowdown.Markets want employment to cool enough to reduce rate pressure, but not weaken enough to create a recession scare. Strong jobs and wages could push yields higher again. A severe miss could initially help bonds before raising concerns about economic growth.Relief Rally or Trend Recovery?The recovery is real, but its durability remains unproven.USTEC and US500 have reclaimed their four-hour 200 EMA bands. MAGS and several of its largest holdings have also formed bullish divergences and bounced from support.Now the rally must survive resistance, sticky inflation, central-bank signals and Thursday’s labour data.The bullish case requires the indices to hold their reclaimed trend bands while the Magnificent Seven move above their EMA resistance.Until then, this remains an encouraging relief rally with room to continue, but also one that could still be rejected by the same technical and fundamental pressures that caused last week’s decline.Disclaimer: For educational purposes only. Trading comes with substantial risk, leading to possible loss of your capital. Traders are advised to do their own due diligence before investing.