FxPro Financial Services Ltd | Mar 02, 2023 09:25AM ET
The major US indices are under pressure amid the ongoing reassessment of the Fed’s monetary policy outlook. The S&P 500 and Nasdaq 100 are testing key technical support again, returning to the crossroads they left over a month ago.
This morning’s decline has stopped at a distance from the 50-day moving average, which often acts as a trend indicator. A consolidation below these two critical curves would signal that the market is ready to move lower.
In that case, January’s rally would fit into a typical corrective pullback from the global highs of November 2021 to the lows of October 2022. A return to 10700 is a matter of “when”, not “if”.
However, the outlook for the market is by no means a foregone conclusion. There is still a chance that the 50-day moving average will hold and the 200-day moving average, the so-called “golden cross”, will be broken in the first half of March. That will be a bullish signal for a wide range of players and doubly true if the price is above that cross.
Also bullish is the fact that the RSI on the daily chart is out of the overbought zone. In other words, the correction that was called for in early January is already complete.
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The FxPro Analyst Team
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