S&P 500 Rises Following Inflation Data Release
Historically, September has been the worst month for the S&P 500 (US SPX 500 mini on FXOpen), and the start of the month reflected this trend, with the index dropping around 4.5% from 1 to 6 September, indicating bearish sentiment.
However, yesterday's event the release of the Consumer Price Index (CPI) may have marked a turning point.
According to Reuters, US inflation data showed that the core CPI rose by 0.28% in August, slightly above the forecast of 0.2%. This led market participants to believe that the Federal Reserve might agree to a 25-basis point rate cut next Wednesday.
Technical analysis of the S&P 500 (US SPX 500 mini on FXOpen) chart indicates:
The price is moving within an ascending channel (shown in blue), having rebounded from its lower boundary yesterday and breaking the local descending trend line (shown in red).
The movement from B to C is approximately 50% of the A to B impulse, a bullish signal that suggests the "normal" correction may be complete, indicating a potential rally from the 5 August low.
Yesterday's price drop was a false move (indicated by the arrow), creating a bear trap.
As of mid-month, the outlook appears positive. Its possible that the S&P 500 (US SPX 500 mini on FXOpen) could finish the month in the green, though the Fed's long-anticipated rate cut decision, expected next week, will play a crucial role in this outcome.
Read more: https://fxopen.com/blog/en/oa-s-p-500-rises-following-inflation-data-release/
Text source: Forex Trading Blog
