S&P 500 Index Stabilises Near Resistance Block
The ATR indicator on the S&P 500s 4-hour chart (US SPX 500 mini on FXOpen) currently shows a reduction in price volatility.
This drop in volatility can likely be attributed to:
The market having fully absorbed the impact of Trumps recent presidential win;
No unexpected news from yesterdays CPI report, which matched analysts inflation expectations.
Looking ahead, Morgan Stanley analysts believe the bull market could face challenges from:
A rise in treasury bond yields, potentially diverting investor funds;
A strengthening dollar, which could reduce export revenues for large companies;
Indicators suggesting stock valuations are becoming even more stretched.
Technical analysis of the S&P 500 chart (US SPX 500 mini on FXOpen) highlights that price is at a resistance zone created by:
The upper boundary of the upward blue channel, which began in early September;
The upper edge of the long-term ascending channel (shown in orange, previously charted in our S&P 500 analysis on October 14);
The psychological level of 6,000 points.
Given these factors, its reasonable to anticipate that bulls may encounter difficulties if they attempt to push past the 6,000 level.
A potential pullback may emerge following the S&P 500's 4% rise since early Novemberperhaps towards the channels median or lower boundary.
Read more: https://fxopen.com/blog/en/oa-sp-500-index-stabilises-near-resistance-block/
Text source: Forex Trading Blog
