US500 (S&P500) is consolidating ahead of key macroeconomic readings to be released in the US today.
- Core personal consumption expenditure price index (PCE) – Fed’s preferred way to measure inflation (forecast – 0.2% MoM)
- Initial jobless claims (forecast – 201K)
- Personal income & spending (0.3% MoM & 0.7% MoM)
Any significant deviation from the forecasted values may have a substantial effect across many asset classes, including the US’ leading stock index – S&P500.
- Lower-than-expected core PCE (>0.2%) may translate into US500 moving higher, with a potential to reach/move above it’s all time high (~5111.8) posted last week
- However, higher-than-expected reading may signal a potential postponement of the highly anticipated interest rate cuts. This could translate in to US500 moving lover towards 21-period SMA (~5011.63)
At the time of writing the market implies a 60.8% chance of rate cut during the Fed’s meeting in June.
On the technical side …
- US500 is trading above key simple moving averages (21, 50 & 100-period SMAs), underscoring a strong bullish momentum
- Immediate potential resistance level is located at psychologically important 5100.0 while to the downside the 21-period SMA (~5011.63) is set to provide an immediate support in case of a trend reversal
- Relative strength index’s (RSI) position (~61.21), 10 points below the upper threshold (70), underlines the current consolidative state of the markets ahead of the release of key macroeconomic data (catalysts).
A moderate gap (~9 points) between the RSI’ current value (~61.21) and the upper boundary (70) could mean a further upside potential
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