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US100 Uptrend in Consideration after Lower High

US100 stock index is keeping its higher lows connected with an ascending trend-line drawn from the end of December, but the lower high registered at 7,976 earlier this month has brought some doubt about whether the market will stretch its uptrend to a new record high anytime soon.

The momentum indicators are currently reducing the odds for such a case as the MACD seems to be making its way down under its red signal line and the RSI has reversed back towards its 50 neutral mark.

A retest of the upward sloping line, which intersects with 7,512, the 23.6% Fibonacci of the bullish wave from 5,848 to 8,033, could occur if the price crosses below the 20- and 50-day simple moving averages (SMAs). The 200-day SMA currently at 7,357 could prove a tougher barrier, deterring any negative extension to the 38.2% Fibonacci of 7,195. In continuation of the bearish correction, a forceful breach of the 50% Fibonacci of 6,933 could confirm more losses ahead, reducing confidence in the market’s uptrend.

On the flip side, a strong rebound above the latest peak of 7,976 could meet immediate resistance around the record high of 8,033. If the bulls manage to clear that top, the buyers could search for a new all-time high between the 8,100 and 8,300 psychological levels, turning at the same time the medium-term picture from neutral to positive.

In brief, US100 is expected to perform neutral-to-bearish in the short-term, with the ascending trendline .seen as a key support. In the medium-term picture, the outlook is neutral and only a closing price comfortably above the all-time high of 8,033 could revive the bullish sentiment.

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