As indicated by the S&P 500 index chart (US SPX 500 mini on FXOpen):
→ After breaking above the resistance line (shown in red) in the third week of December, the equity market formed an upward trend, consistent with the typical characteristics of the Santa Claus Rally.
→ At the opening of trading in the final week of the year, the market is showing downward momentum. The index has slipped towards the 6,920 area, reflecting the sentiment of remaining market participants ahead of key news releases: the FOMC meeting minutes on 30 December and US labour market data on 31 December.
Technical Analysis of the S&P 500 Chart
Price action analysis points to a lack of conviction among bulls. After breaking above the 11 December high near the 6,934 level, further progress was limited, with the price failing to show signs of firm consolidation at record highs.
At the same time, bears became more active, as evidenced by the long upper shadow (marked by the arrow). Their pressure proved effective, resulting in a break below the median line of the ascending channel.
It cannot be ruled out that bearish momentum will continue, pushing the S&P 500 index (US SPX 500 mini on FXOpen) down towards a support zone formed by:
→ the psychological 6,900 level and the 24 December low near 6,907;
→ the lower boundary of the Santa Claus Rally ascending channel.
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