Technical Analysis – US 100 cash index edges lower; all eyes on the stochastic
The momentum indicators are equally mixed with the RSI remaining at 50 but moving horizontally and making lower highs. With the Average Directional Movement Index (ADX) sunk below its 25-threshold, the focus turns to the stochastic oscillator. This indicator is trying to move back inside the overbought area, battling with its moving average (MA).
Should this occur, bulls would probably feel more confident to stage another move higher. They would quickly push for a retest of the August 26, 2022 high of 13,206. Higher, the busier 13,600-13,721 range, populated by the August 16, 2022 high and 50% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend respectively, would probably prove tougher to crack.
If the stochastic oscillator fails to edge above its MA, the bears could try to quickly push the US 100 index towards the 50% Fibonacci retracement of 12,852 and the “inner Bollinger line”. If successful in breaking these support points, the path looks clear until the 12,465-12,554 range set by September 2, 2020 high and the 50-day SMA.
To sum up, the bulls managed to push the index higher amidst a difficult period. All eyes are on the stochastic oscillator's move that will most likely play a crucial role in dictating the next short-term trend.To continue reading this article in full, log in to your Members Area
Gain Unrestricted Access to Free News from Reuters, Technical and
Fundamental Analysis as well as Trading Signals.
Risk warning: FX and CFD trading involves a high risk of loss.T&Cs Apply
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
