Technical Analysis

S&P500 (SPX) Price Analysis – June 28, 2024

By LonghornFX Technical Analysis
Jun 28, 20243 min

Daily Price Outlook

The S&P 500 has been performing strongly, staying around the 4,482 level and reaching an intraday high of 4,490. Investors are keeping a close eye on the Federal Reserve's stance on monetary policy, especially regarding potential interest rate cuts.

Fed officials, including Governor Michelle Bowman, have indicated a cautious approach due to ongoing inflation concerns. This has boosted investor confidence, as lower interest rates generally drive economic activity and corporate earnings, which in turn supports stock market values.

US Economic Indicators and Fed Signals Impact on S&P 500

On the US front, softer macroeconomic data published on Thursday has increased expectations for the Federal Reserve to begin cutting rates soon, sparking an upward rally in the S&P 500. Key data releases, including the US real GDP growth, Durable Goods Orders, Initial Jobless Claims, and Pending Home Sales, have highlighted the mixed nature of the economic recovery.

Although GDP growth for the first quarter was revised upwards, it remains modest. Meanwhile, Durable Goods Orders slightly exceeded expectations, indicating resilience in certain sectors.

However, there are worries about job numbers because the average number of people filing for unemployment benefits over the past four weeks has gone up. Investors are watching closely to see what the Federal Reserve will do next.

The Fed's careful approach, along with these economic reports, has influenced how investors feel and how the stock market is performing, with the S&P 500 showing cautious but steady growth.

Upcoming Data and Its Impact on S&P 500

Looking ahead, investors are waiting for important economic data, especially the US Personal Consumption Expenditures (PCE) Price Index. This report is crucial because it's the Federal Reserve's preferred measure of inflation.

People will watch it closely to understand if prices are going up and what that might mean for Fed policies on interest rates. Economists predict a small rise in the core PCE, which shows that inflation pressures are under control.

Hence, the favorable outcome could ease concerns about overheating and support the case for a gradual easing of monetary policy, thereby bolstering equities.

Conversely, any surprises indicating stronger inflationary trends could prompt renewed volatility, as investors recalibrate their expectations regarding the pace and timing of future Fed actions.

S&P 500 Price Chart - Source: Tradingview
S&P 500 Price Chart - Source: Tradingview

S&P 500 - Technical Analysis

The S&P 500 is trading at $5482.88, up 0.09%. The 4-hour chart highlights critical price levels, with the pivot point set at $5468.10. Immediate resistance is positioned at $5505.65, followed by $5522.02 and $5536.94. On the downside, immediate support is identified at $5447.72, with further support levels at $5427.20 and $5408.64.

The Relative Strength Index (RSI) is currently at 59, indicating neutral momentum and suggesting that the index is neither overbought nor oversold. The 50-day Exponential Moving Average (EMA) is at $5447.29, acting as a key support level. Maintaining above this EMA could suggest continued upward momentum for the S&P 500.

Traders should consider entering positions above the pivot point of $5468.10, with an eye on the first resistance level at $5505.65. A break above this resistance could pave the way for gains towards $5522.02 and $5536.94. Conversely, a drop below the immediate support at $5447.72 could signal a decline towards $5427.20 and potentially down to $5408.64.

In conclusion, while the S&P 500 shows slight gains, the overall outlook remains cautiously optimistic above the pivot point of $5468.10.

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