Technical Analysis

S&P500 (SPX) Price Analysis – Aug 29, 2023

By LonghornFX Technical Analysis
Aug 29, 20233 min

Daily Price Outlook

The global market sentiment has been up and down recently. At the beginning of the week, things looked positive, but now on early Tuesday, people are becoming more cautious. Traders are trying to figure out if this positive feeling will last, especially because there isn't much important news today in Asia and not many big economic updates.

Currently, the S&P 500 Futures are not showing a clear direction and remains dicey around 4,445 points. This comes after a couple of days of gains. At the same time, the yield on the US 10-year Treasury bond, which is an important indicator of borrowing costs and market confidence, is staying around 4.19%.

Central Bankers' Challenges and Rate Hike Uncertainty

It's important to mention that central bankers worldwide are facing challenges due to mixed economic data and recession worries. Traders are paying close attention, especially after policymakers discussed their cautious strategies at the Jackson Hole Symposium last week. Jerome Powell, who leads the US Federal Reserve, is considering raising interest rates to control borrowing. However, decisions depend on the economy's performance, creating uncertainty. Another banker, Loretta Mester, suggests raising rates, possibly not immediately in September. Chances of rate increases in November have improved recently according to predictive tools.

Hence, this news has left market sentiment uncertain as central bankers grapple with mixed data and recession concerns. Traders are attentive due to potential rate hikes and economic uncertainties discussed at the Jackson Hole Symposium.

Market Impact: Trade Talks, IMF Meeting, and Economic Sentiment

Besides this, there's mixed news about US-China trade talks, and the IMF's leader plans to meet China's leaders. This is making people more cautious about taking risks in the market. China's effort to boost its economy by reducing stock trading costs aligns with the mood at the Jackson Hole Symposium, where no surprising economic decisions were made. As a result, the US dollar is slightly weaker versus other currencies. This news is making the market more cautious due to mixed US-China trade talk updates and the IMF's interest in China. China's economy-boosting move and uneventful Jackson Hole Symposium have slightly weakened the US dollar.

Looking forward, traders will focus on Germany's GfK Consumer Confidence Survey for September, followed by the US Conference Board's Consumer Confidence Index for August. More importantly, attention will be on the US Core Personal Consumption Expenditure Price Index for July and August's Nonfarm Payrolls. These indicators will play a significant role in shaping market trends.

S&P500 (SPX) Price Chart – Source: Tradingview
S&P500 (SPX) Price Chart – Source: Tradingview

S&P500 (SPX) - Technical Analysis

Upon examining the technical aspects of the S&P 500, it currently indicates fluctuations around the 4430 level. Analyzing the four-hour chart, the S&P 500 has rebounded from a significant support level of 4350. The manner in which the candles have closed suggests that the S&P 500 carries potential upside momentum.

It is nearing the 38.2% Fibonacci retracement level situated around 4440. Should the S&P 500 maintain its position above this level, it will likely encounter the next significant resistance at approximately 4475. Further upwards, another major resistance aligns with the 61.8% retracement level, amplified by a 61.8% extension. Conversely, if the S&P 500 drops below the 4400 level, subsequent support can be expected at 4450 and 4335.

The pivotal focus remains on the crucial support level of 4400, which is also today's pivot point. A stance above this level indicates a probable continuation of the bullish trend, while a position below may suggest further selling pressure.



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