US 500 index tests downtrend line and moves lower

The US 500 is finding strong resistance near the long-term declining trend line which encapsulates the peaks from January 2022. Also, the price successfully jumped above the 200-day simple moving average (SMA) and the bullish crossover within the 50- and the 100-day SMAs. The MACD is still moving above its trigger and zero lines, while the RSI is heading south in the bullish area.

Immediate support to further declines may be taking place around the 200-day SMA at 3,960 before meeting the 50-day SMA at 3,920 and the 3,900 support. Moreover, the 100-day SMA at 3,864 could provide additional support, while in case of steeper losses the 38.2% Fibonacci retracement level of the up leg from 2,180 to 4,800 at 3,810 may halt bearish actions.

A penetration of the falling trend line would be a bullish sign to run towards the 4,100 resistance level ahead of the 4,150 barrier. The region around the 23.6% Fibonacci of 4,200 could act as an additional obstacle in case of stronger bullish movement.

The long-term picture is still looking bearish at the moment, with price action still taking place below the downtrend line. Any moves above this line could brighten the outlook to bullish.  

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).