- Summary:
- The S&P 500 index opens lower as traders offload existing long positions so as to await the decision by the FOMC later today.
The S&P 500 index opened lower this Wednesday, as traders realign their positions ahead of the decision by the Federal Open Market Committee (FOMC) of the US Federal Reserve.
Dankse Bank analysts expect the major trigger from the decision to centre around the Fed’s language in describing its plans for the QE program. Specifically, the bank expects the FOMC to maintain its accommodative stance, with FOMC Chair Jerome Powell acknowledging that discussions on tapering have moved closer.
As of writing, the S&P 500 is down 0.19% and presently trades at 4238.75.
Technical Levels to Watch
The S&P 500 index is just short of the 4260 mark set by Credit Suisse some weeks ago as the immediate upside target. This is the price to beat for bulls. If the FOMC maintains its accommodative stance, this would be positive for the index, and we could see a break of this level, targeting the psychological resistance at 4300.
On the flip side, if the FOMC Chief acknowledges that the higher inflation figures may be more long-lasting than the Fed thought, this could be a sign that early tapering may be on the way and the S&P 500 index asset may get sold off. This move would target the 4220 support initially, with 4176 and 4150 serving as additional downside targets. 4120 and 4082 are also other targets to the south.
S&P 500 Index; Daily Chart
