S&P 500 Tests Key Resistance Ahead of FOMC Decision

Today is bound to be a volatile session for the indices, particularly after the FOMC interest rate decision. The market anticipates either a 25 or 50 basis point cut, and the outcome will likely dictate movements for the rest of the week.

Right now, the S&P 500 is at a pivotal moment, testing a key resistance level at 5,660 points. This level, marked in green, has served as a major resistance point several times in recent months—first in July, then in August, and once again in September. Yesterday’s test of this level resulted in a false breakout to the upside, marked with an orange color on the chart, where the price spiked above the resistance but quickly reversed, dropping significantly lower.

Today, the index is making another attempt to break through this critical resistance level, but it’s also shaping up to form the right shoulder of a head and shoulders pattern. Yesterday’s movement could be interpreted as the head, and today’s action could create the right shoulder. The neckline of this head and shoulders pattern is marked in blue. A breakout below this neckline would serve as a strong sell signal, especially if the price closes below this level today.

However, if the S&P 500 breaks above this resistance and manages to close the day at new long-term highs, it would be a very strong signal to buy. All eyes are on the Fed’s interest rate decision to see which direction the market will take after this critical moment.

Source: https://www.axiory.com/analytics/technical-analysis/s-p-500-tests-key-resistance-ahead-of-fomc-decisio