Technical Analysis – US 100 index in anticipation mode ahead of the Fed

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Technical Analysis – US 100 index in anticipation mode ahead of the Fed

7:51 sáng giờ GMT, 18 Tháng 9 2024- Achilleas Georgolopoulos

US 100 index trades sideways ahead of the Fed meeting
It battles with the July 11, 2024 descending trendline
Momentum indicators are tentatively bullish

The US 100 cash index is moving sideways today, continuing its low volatility sessions, as market participants are staying on the sidelines ahead of the crucial Fed meeting. The first Fed rate cut since March 2020 will most likely be announced later today with speculation being rife about a 50bps rate cut, with arguable impact on stock markets. Interestingly, a series of lower highs indicates that the bearish trend that commenced on July 11, 2024 is still firmly in place.

In the meantime, the momentum indicators are slightly bullish. More specifically, the Average Directional Movement Index (ADX) is trading sideways and hence signalling a weak bullish trend in the US 100 index. Similarly, the RSI is hovering around its midpoint, confirming a lower volatility period. More importantly, the stochastic oscillator is edging higher, above its moving average. If this move picks up pace towards its overbought area, it would be seen as a very strong bullish signal.

Should the bulls feel confident, they could try to keep the US 100 index above the July 11, 2024 trendline and then overcome the October 26, 2023 long-term trendline. Their next aim could be to break the recent series of lower highs by staging a move above the 19,936 level.

If the bears regain the market reins, they could face strong support at the July 11, 2024 trendline and the 19,185-19,240 area, which is populated by the 50- and 100-day simple moving averages (SMAs). If successful, they could then have a go at pushing the US 100 index towards the key 18,349-18,491 region.

To sum up, market participants are in waiting mode for the Fed meeting that could result in increased volatility and potentially reverse the current bearish trend.